The Challengers: Tom Wyatt Says He’ll Bring Jobs Back to Philly
All week, Citified is featuring Q&As with leading at-large City Council Democratic challengers on topics of their choosing. The prompt was simple: if elected, what’s a problem you would you prioritize, and how would you address it? To keep the conversation substantive and on-point, we asked the candidates to focus on a relatively narrow question (i.e., not “schools,” or “crime.”)
Tom Wyatt’s got multitudes. He’s a big-time lawyer who once lived in a trailer park and worked at Burger King. He’s the chairman of the education committee for the Passyunk Square Civic Association, and he nearly flunked out of high school.
If elected to City Council, he says his agenda would be similarly well-rounded. He wants to create jobs in Philadelphia as well as improve the school system, in part by overhauling the city’s business taxes. He chose to talk about the latter with Citified.
Citified: Why did you want to talk about business taxes?
Wyatt: I think it’s important to me and the city because we have lost 25 percent of our jobs over the last 40 years and our unemployment is unacceptably high and more than one in four of our fellow Philadelphians is living in poverty. And so all of that rolls up into needing to bring jobs back to Philadelphia. And, as you know, we have incredibly underfunded schools and a lot of other funding issues around the city.
And so I talk about taxes not because I think that they are fascinating in and of themselves. I talk about them because I believe fixing our tax structure brings jobs back to Philadelphia, makes us a more competitive marketplace for job growth, and will ultimately raise sustainable revenue for improving our schools and being able to dream big. Once Philadelphia sees its own destiny, dreaming big in ways like pre-K and other great ideas to make this city a better place, particularly for our youth.
Citified: You want to eliminate the profits part as of the city’s business tax (known as the net-income portion), and then make up for it by raising the sales part (known as gross-receipts portion).
Wyatt: In a temporary way. … The principal of the matter is that we need to make Philadelphia a more competitive place for job growth and, yeah, getting rid of it ultimately over time and in a way that is considered and revenue-neutral, getting rid of the net income tax for businesses that are headquartered here and temporarily making up for potential shortfalls in revenue by increasing, not dramatically, but increasing the gross-receipts.
Citified: What is the benefit of that plan?
Wyatt: I think that the gross-receipts is so broad-based and so small that you can generate a lot of revenue with relatively little increase in the tax, whereas the net-income tax is not broad-based. It’s only for businesses that are headquartered in Philadelphia. And it’s quite high. It’s 6.4 percent as you probably know. So we think that it’s temporarily, and only in a small way, raising a very broad-based tax. And by broad-based, I mean every business that touches Philadelphia more than 10 times a year pays that gross-receipts tax. We think you can make it revenue-neutral, and then allow the marketplace to expand and businesses to move in and jobs to be created.
Citified: Councilwoman Maria Quiñones-Sánchez and former Councilman Bill Green introduced a very similar proposal few years ago, and it didn’t pass. Why do you think you’d be more successful now?
Wyatt: … They did a lot of good work, and so those are some very nice trees to live in the shade of. … We are out of balance, when you think about Philadelphia and then you think about Boston, New York and Washington, D.C. — cities that have grown jobs. They’ve grown jobs in the face of losing a dramatic percentage of manufacturing jobs. So if you look at the way that they’re taxing, they’ve realized that you cannot aggressively tax things that move. You have to tax commercial property to make the engine run in today’s economy.
So I think that reinvigorating the conversation in the context of creating sustainable revenue for our schools, and in the context of of don’t continue to drive jobs out of the city. As I think I might have mentioned, over the last 40 years, we lost over a quarter of our jobs in the city and more than a third of our workforce in Philadelphia. People who work wake up and leave the city for work. We can’t continue on this path. And so I think there’s yet more data since Councilwoman Sánchez and Councilman Green brought this forward for a rebalancing of our tax structure. And I will be a very constructive and fierce advocate for it.
Citified: It’s been interesting to hear you talk about this business tax plan, when the tax plan that has been most talked about this election season has been the Levy-Sweeney plan, which would shift the city’s tax burden from wage and business taxes onto property taxes. Do you support it?
Wyatt: I do think it’s a very good idea, and I think that my idea, my plan will help prove out the wisdom of the Levy-Sweeney plan. Now of course, as you know, it would require a constitutional amendment, which I on Council and as a citizen would work quite hard to make that happen. But it’s a longer-term play. I think it takes two years to make that happen. But I would be a strong advocate for that on Council and as a Philadelphian.
Citified: Right, changing the constitution is a big challenge. It would change a rule that conservatives really like, which is keeping all taxes uniform. I don’t see how that would ever pass in the General Assembly unless leadership changes and Republicans are no longer in the majority.
Wyatt: … I’m not going to knock them for dreaming big, and I’d like to help. But I will say that the benefit of my plan is that doing what I suggest, what I’m recommending, doesn’t require a constitutional amendment. And it would reinvigorate the commercial real estate market. So I think that you’re right, that it is more difficult because it’s not something that Philadelphia can do for itself. And that’s why I think my “Bring Jobs Back” plan is pretty easy because it is something we can do ourselves, and like I’ve said previously, has the potential to prove out the wisdom of the Levy-Sweeney plan.
Citified: Explain why it would prove that out.
Wyatt: If we see the demand in commercial real estate rise, we’ll see revenue from commercial real estate taxes rise, and so we’ll begin the rebalancing process of not punishing working families and profitable businesses, but rather balancing our tax structure to be in line with Boston, D.C., and New York, and don’t aggressively and competitively tax things that can move. Because as you probably know, in today’s day and age, you’re not buying a multimillion-dollar factory and business is definitely going to stay. In today’s day and age, a conference table and a connection to the Internet can create billions of dollars of wealth. And that can be done anywhere. What we need is to make Philadelphia a competitive place where it’s happening here.
Citified: You claim that under your plan, the gross-receipts tax would be increased only temporarily. Philadelphians have heard that a lot before — that taxes will be temporary, and then they turn out to be permanent. How would you assure residents that it would be truly temporary?
Wyatt: Well I think it would be, you know, written into the ordinance. And it would be executed according to the plan. I think if it’s well thought-out and the right stakeholders are participating in the hearings and the leaders in business and the like are participating in it, I think it it will play out as planned.
Citified: Is there anything else you’d like to add?
Wyatt: I also wanted to just say that I think I’m uniquely qualified to carry forth some of these ideas. I have experience in the boardroom as an executive of a multibillion-dollar organization, and I’ve worked on tens and tens of transactions and negotiating them and solving hard problems for big businesses. And I think that my skill in big business and my skill in the community and in the classroom as a teacher gives me a very good perspective. And my nature is that of a collaborator and a constructive colleague. So I think those are the things that I will bring to Council.