- Today's Email from Siobhan Reardon
- Seth Williams Office Opening Party: TODAY
- Hear, hear: Judge Fox's Order
- Bob Brady saves New Year's and the Mummers!
- Mayoral Petulance: Unbelievable
- ’San Quentin Six’ prisoner Hugo Pinell to have Parole Hearing Jan. 17
- The Nutter administration (and us) at the crossroads
- Ring around the rosey, pockets full of.....
- Ring around the rosey, pockets full of.....
- Tom Ferrick on the Library Fight
The Big Question for the Nutter Butters
Submitted by Dan U-A on Fri, 02/23/2007 - 10:59am.
In my mind, at this point, I have three people who I right now see as potential good Mayors- Evans, Fattah, and Nutter. Each have their own strong suits. (Knox, I have discussed. Brady, until he releases policies, and tells me how he is going to shake things up a little at City Hall, will not really get my consideration either.)
Anyway, this is a basic question for the Mike Nutter supporters out there, and, for the Nutter campaign itself:
Nutter has, fairly or unfairly, been pegged as the BPT guy, right? He pushed to eliminate it, and bragged about that pretty recently. But, he has modified his position, to where he now wants to bring the tax down to the level of the wage tax. So, he has changed, and moderated his take- that is a good thing to see.
But here is my question: Why wouldn't we want some sort of fail safe mechanism if tax cuts didn't work out as planned, as Stan often asks? What exactly is wrong with that? Unpassing a tax cut is basically impossible politically- so, all the prevention of a fail safe does is give the appearance that you want tax cuts, consequences be damned. But, that is not what you want, right?
So, again, question 1: why exactly wouldn't you want to have a fail safe mechanism for cuts?
And question 2: Are you ready to push for increases in the real estate tax at the same time, as the tax reform commission implied would be needed?
I am not looking for a long discussion of supply side economics here. I just want answers to those two, basic questions.
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1) I personally do not have
1) I personally do not have a problem with a fail safe. Pass a law for the tax breaks that expire in x years. If they are working, Council renews them/makes them permanent. If they aren't, they expire and return to their other levels at the same graduated rate as they went down.
2) I do not recall any candidate saying BPT cuts will be matched with tax increases elsewhere.
Fattah, Nutter, and Tax Reform
Crossposted from the Comments thread here:
I think both parts of this statement are misleading. Virtually all of the candidates have called for the elimination of the gross receipts portion of the BPT. I'm confused about whether Fattah is planning to set the rate for his net profits tax above the 6.5% of net profits already collected under the BPT -- I haven't been able to find anything in the campaign literature or anywhere else that says (even roughly) what the percentage would be or how this change would ultimately be revenue neutral. (If anyone could point me to this information, I would greatly appreciate it.)
Also, just to speak up for Nutter's plan -- from what I understand (mostly from this Inquirer article) the reduction in property tax increases above 10% for low-income home owners would be paid for by a restructuring of the current 10-year property tax abatement. Under Nutter's housing plan, Nutter "would ask City Council to increase future abatements to 15 years in neighborhoods where there is little new housing and cut them to five years in areas where development is strong."
In general, my sense of Nutter's tax policy is that very little of it actually boils down to supply-side "voodoo economics." Most of his proposed cuts on wages (note that I'm not sure whether he plans any future cuts in the wage tax) and the BPT (where he wants to eliminate the gross receipts portion and reduce the net profits to the level of the wage tax) would be compensated for by reducing property tax abatements and possibly increasing property taxes, especially on businesses and in areas that are already well-developed. This, at least, is the sense I get from his comments in this excellent Inquirer article from last April, where he says,
Note also this bit of data from the same Inquirer article:
To me, Nutter's move to insulate low-income residents from property tax increases seems like a way to head off the criticism that property tax increases would disproportionately hurt Philadelphia's plentiful lower-middle-class homeowners. It's a difficult issue to broach, largely because of anxieties about increasing property taxes, gentrification, etc. But I suspect that if Nutter were mayor, the BRT would "reevaluate" a lot of undervalued commercial properties, a la the recent flap with the casinos.
One last point about property taxes. It may be impossible to underestimate how much more revenue the city could utilize if it were the least bit serious about collecting property taxes. There are huge outstanding monies, ranging from deadbeat landlords to major institutions (cough -- Penn! -- cough) that regularly fail to pay their property taxes.
Here's a quote from Ed Schwartz from the Institute for the Study of Civic Values:
In most cases, when a candidate says they'll save money or pay for programs, through more efficiency and rigorous collection policies, they are simply blowing smoke. But in Philadelphia, this is absolutely true. And any candidate who can both set an example and hire and promote good managers in this and other areas of city government can make the city immeasurably better.
Not to unnecessarily bump
Not to unnecessarily bump myself, but I started another thread ("Hard Numbers From the Philadelphia Budget and Some Questions") where we're trying to make some sense out of real and estimated numbers for these taxes in the 04-07 budget.
How much money does the city make from BPT? Can anyone figure out how much of this comes from gross receipts and how much from net profit? What would the net profit rate need to be for a version of the BPT without gross receipts to be revenue neutral? What has been the effect of the wage tax and gross receipts cuts on total revenue? How much money does the airport really make? These and other questions remain to be answered.
The Dangers of Uncertainty
(Cross-posted at "Tax Skeptics Rant.")
Dan, the problem I see with an automatic trigger -- assuming this means an automatic rollback in the BPT if certain revenue targets aren't hit -- is that it creates tax instability. Businesses (and workers too) want to be able to project with some certainty what their tax burden will be in both the near and long-term future. If companies have to deal with too much uncertainty in their projections, they'll go elsewhere. Especially if they're the sort of businesses for whom a reduction in the BPT is going to change their mind about investing in Philadelphia. I think this is the reason why Nutter has pushed for "guaranteed" tax cuts for both wages and business revenue. It's definitely why the board of revenue posts what the tax rates will be from now until the next decade.
Businesses like uncertainty even less than high taxes. And no business worth their salt would ever want to peg their profits to the city of Philadelphia having their shit together. If anything goes wrong -- if the casinos aren't profitable, if the airport doesn't bring in the money it should, if there's a business downturn -- they would have to take the hit. Instead, they'll take a pass.
You have more traction with your second point in the other forum, which is that Nutter (or anyone proposing a substantial cut in the BPT) should propose a way to make up the revenue somewhere else. Fattah wants to raise taxes on gross receipts, perhaps coupled with some deeper restructuring (it's not clear yet exactly what he wants to do.) The natural move for Nutter would be some targeted increase in the property tax. Since property taxes tend to be variable anyways, they can be adjusted year-to-year as needed to balance the budget without producing anything like the uncertainty caused by a potential increase in business taxes.
My bet is that the reason Nutter is holding off on proposing an increase in the property tax is the same reason Fattah is holding off on setting a rate for gross receipts. Nobody wants to talk tax increase early in an election -- everybody wants to talk tax cuts. Fattah thought he could get some support from green-minded Dems by talking up a congestion tax, and he got drilled. I don't think anyone else will talk new taxes at all until after the primary.
The tax reform commission recommended uncoupling residential and commercial taxes and pegging property tax rates to the projected annual budget (not as they currently are, a function of assessment alone). This would bring us in line with standard municipal practices virtually everywhere but Philadelphia. And it is what I suspect Nutter would do to balance the budget. He ought to, anyways.
Note that at no time, to the best of my knowledge, has Nutter or any other candidate suggested or promised that a reduction in the total business tax burden would magically pay for itself. This is the supply-side budget logic, and it's always been proven wrong.
A reduction in the BPT has almost always been treated by its proponents as a reduction in the overall revenue stream (albeit a productive one) which would have to be made up somewhere else. The only debate has been whether it would be Total Revenue Disaster, with companies all taking out their extra cash in bags, or a smaller hit offset by the increase in total profit made and business done elsewhere in the city -- which, as many people have pointed out, has been steadily increasing anyways despite reduction in taxes. This doesn't mean that lower taxes caused revenue increase. But it suggests that as business prospects in the city improve, we can continue to reduce our taxation rate without creating a budget crisis.
Supporting Michael Nutter for Mayor.
My answer to Q1
I support a reduction in the BPT. It seems pretty clear that it has had a harmful effect on growth and has caused a lot of growth to be displaced from the city. I see the following reasons for not having a fail safe:
1. Cutting the BPT is a good thing and should take effect.
2. The BPT is only one factor in determining whatever factor would trigger the fail safe. A national recession should not trigger a fail safe if the local economy is better than it would have been with a higher BPT.
3. Fail safe or not, political impossibility or not, future city councils can adjust taxes as necessary. They were able to get taxes this high some how.
4. The city would be better off looking to other sources, such as raising real estate taxes, than it would be raising the BPT again. A fail safe makes it too easy not to do the best thing for the city.
5. Stan wants a fail safe, so it must be bad.
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I support Michael Nutter for Mayor.
This is what I don't get:
This is what I don't get:
A dramatic cut in the BPT might not do a thing. Other cities have cut taxes, with no effect. Why wouldn't you want to be sure? To me this is fundamentally too ideological. Taxes are not good, or bad. They are a part of having government. And, we would be cutting them not because cutting taxes is some sort of inherently wonderful thing (there are many times, ie, the last 6 years nationally, when I think the opposite has been true). They are in theory, a means to an end, right? Growing the economy, and giving more people jobs.
You 100 percent believe the correlation between taxes and receipts has actually been a causation. I truly don't think so. But if you are sure, then why not a fail safe?
I don't get this either. If Philly is doing well, you can always re pass the cut, right?
And Council can always keep cutting taxes, as it has.
OK, but, then you basically are at once saying the following:
1)Don't worry about whether it is politically impossible to stop tax cuts, City Council can do it if needed.
And 2)We need a fail safe because City Council is not likely to do what is best for the City, but what is easiest. Seems contradictory, to me.
Again, lets focus on this
(As an aside... I disagree with you that you that cutting taxes will do a ton. Lets just agree to disagree on that, for now.
I don't want to debate the causation/correlation thing, I don't want to debate supply side econ- lets do that another time.)
Clarifications
Where have I ever said that? What I have said repeatedly is that cutting tax rates is not the same as cutting revenue. So many posters ignore that revenue has increased while tax rates have declined. This is taking us away from the failsafe discussion, but I want to clarify what I believe.
The recent increase in tax revenue is from economic growth. I do not think 100% of this growth is due to tax cuts. I do think that taxes do have an effect on growth. (100% belief in some causal effect, but not belief in 100% causation.) I 100 percent believe that Philadelphia's excessive taxes have had a negative effect on the city over the past 50 years. I posted in BradyDale's poverty thread a link to this article which says "the wage tax can directly explain the loss of roughly 100,000 jobs from Philadelphia over the period 1969 to 1985." Taxes are not good or bad, but excessive taxes are bad. I want to get them to the right level, which for the BPT is lower. And again, cutting tax rates is not the same thing as cutting revenue.
I agree with you that W. Bush's tax cuts were not a good thing.
I don't see contradiction between the following statements: 1) city council can raise taxes, and 2) they can raise the wrong tax.
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I support Michael Nutter for Mayor.
OK, on
OK, on correlation/causation- thats fine. Sorry if I misinterpreted you.
As for the final point, I dont get it, again. Basically, what it comes down to, is that without seeing the results, you want to cut the BPT. And, you dont trust City Council if there was a fail safe. But you do trust them if there was not one?
I don't trust them in either
I don't trust them in either case. A failsafe makes raising the BPT again easier than it would be without a failsafe (or even automatic), rather than forcing them to consider other (and possibly better) options.
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I support Michael Nutter for Mayor.
OK, well, thats a problem
OK, well, thats a problem for me.
I wonder what the Nutter campaign says about it.
Still confused
I'm still stuck on the basic logical flaw that Dan spoke to. If the benefits of cutting the BPT are so clear, and would automatically have a payoff (even they payoff wouldn't, in itself, drive an economic recovery), then why would Council raise the rates again? Why would they reject "better" options?
You can speculate all you want about the rather hard to predict impact of a safeguard, but I find it strange that Nutter hasn't addressed these issues -- even though he must know that some folks who are considering voting for him would be reassured by the provision of some safeguards.
As it stands now, we haven't even heard speculation like yours from his campaign. We've heard nothing. Strange. I see some disturbing possible reasons for that, (1) he's such an idealogue on this issue that he won't even address potential problems with his position, (2) he's such an idealogue on this issue that he doesn't even want the vote of anyone who is concerned about the dangers of eliminating such a signficant source of revenue, (3) he's got some backing which is contingent on his being inflexible on this issue.
Other reasons?
If the BPT increased
If the BPT increased automatically because of a failsafe, other options (such as raising property tax) may not be considered at all, or receive the consideration they deserve. City counsel would not be rejecting better options that they would never have considered in the first place.
There doesn't have to be a shady reason that Nutter hasn't engaged in our speculation. Other than for Stan and a few other posters here, the failsafe doesn't seem to be big issue in this campaign, and Nutter is not going to get Stan's vote anyway. What has Fattah, Evans, Knox, or Brady (all of whom promised reduction in the BPT) said about the failsafe? Oh yeah, NOTHING.
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I support Michael Nutter for Mayor.
Fattah has said he's not cutting tax revenue
so why would he need a fail-safe? And Evans has suggested pretty strongly that he doesn't believe in tax-cutting magic either. The onus is on Nutter, Knox and Brady, all cutters who want to spend more.
Fattah pledged to eliminate
Fattah pledged to eliminate the gross-receipts portion of the business-privilege tax. I don't understand why Fattah's tax cuts won't affect revenue, but the tax cuts of every other candidate would.
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I support Michael Nutter for Mayor.
As I posted here before
Fattah also said he would set his new net profits tax at whatever level it needed to be at in order to keep the effect of the gross receipts tax repeal revenue neutral. Here again is what his position paper says:
In his first budget, Chaka Fattah will call for eliminating the Business Privilege Tax. To keep the city’s finances revenue neutral, Fattah will propose a Philadelphia Net Profits Charge. This will eliminate the gross receipts portion of the current tax and do away with double taxation while broadening the tax base in a fair and equitable way.
"To keep the city's finances revenue neutral" You may not like it, but at least it's clear and courageous in the political environment we're in. And it means he needs no fail safe, and he's not running around saying increase spending and cut taxes.
(Sorry I'm not there yet on formatting. Otherwise the above would be full of italics, boxes and other neat things.)
Yuh-huh
Yes, yes he is.
Fattah has promised a ton of spending in every plan that he unveils, and in addition to eliminating the gross receipts tax, he pledges to "Continue to Reduce the Wage Tax". But I guess you should ignore this if he says "revenue neutral" every so often.
Since is not honorable to engage in a fight with an unarmed man, see http://www.youngphillypolitics.com/topic_formatting_codes.
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I support Michael Nutter for Mayor.
Thanks for the help
Maybe I'll have the patience to try that formatting stuff out some day. But in the meanwhile I'd point out, on wage tax cutting, that Fattah links that to the revenue allegedly coming from the casinos. No casinos, no commitment to further cuts in the wage tax. And on the spending side, you should note today's Inky in which he's the only candidate NOT committing to hiring more police.
And, of course, like the plan or not, he does finance a lot of his spending proposals through the airport plan.
The problem is, the Airport
The problem is, the Airport plan may never come to fruition or may happen three years from now.
He needs to have a more comprehensive plan for what he knows we have.
Our candidates need to submit a "100 Days Plan".
Take the blinders off Stan.
Stan, you of all people understand the BPT very well (I think). So you know that there is already a Net Profits Charge. It's already in the BPT. Businesses get taxed on the front-end (gross receipts) and the back-end (net profits). No matter what you call it, there is already a net profits charge in the BPT tax.
So how is Fattah proposing a Net Profits Charge that already exist in the BPT structure? It's already there! According to your argument, if Fattah cuts the gross receipts portion of the BPT like everyone else, there's no way it can be revenue neutral.
You gave the quote from Fattah's position paper as if it explained something. It didn't explain anything. The quote didn't say that he would raise the net profits portion of the BPT. And if he will raise the net profits portion of the BPT, what rate will he raise it to in order to make the gross receipts cut "revenue neutral"?
If all the other guys say: "I'm going to cut the gross receipts portion of the BPT, but it will be revenue neutral," that would be ok wil you. Because that is exactly what Fattah is saying. We all know that it isn't true.
There is a net profits tax I
There is a net profits tax I believe.
I think it is semantics. I am guessing Fattah is proposing to eliminate the business taxes and replace it with a "net profit charge" so that way "raise tax" never gets mentioned.
I think he is just trying to play with words.
Like how his congestion fee is really a congestion tax.
It's just words to minimize voter freak out.
He is identified as the BPT
He is identified as the BPT cutting candidate. There is some legit concern that given his record, he puts that ideology above other priorities.
Fattah, for better or worse, simply doesn't have to argue for a failsafe, because his plan doesn't lock in big long term tax cuts.
Evans, I don't know what his plan is.
And Brady... I believe I referred to his ideas as the magical pony plan, or something.
But, anyway, you may say it doesn't matter- but, it does matter to me.
And, I have a bullhorn. So, I guess I will keep asking and see if the campaign will respond.
Fattah, for better or worse,
On the contrary, I think Fattah has a greater need to argue for a failsafe, because he's pegging his other programs to money from the airport AND that his reworked formula for BPT will be revenue neutral. If Fattah's administration were to set a rate for the net profits tax that either lowballed the total number, or if there were to be a sharp downturn in business's profitability (the same nightmare scenario you're presenting Nutter with), Fattah would have to make up the difference.
As far as I know, Fattah has never said "I will change the rate of the net profits every year to balance the budget." Instead, he's set that his recalculation of the BPT/Net Profits tax will aim for revenue neutrality. He would have to relegislate the tax code every year if he were to do that. And that would be chaos -- no new business would open in the city if their taxes on profit could change every year.
So if the formula is wrong, or if the money from the airport isn't there, what would Fattah do to balance the budget?
Supporting Michael Nutter for Mayor.
One more point.
One more point.
How much of this is about just getting either Nutter or someone from Nutter's campaign to post with an official response on the blog? I get the impression that this debate will not end unless Michael Nutter himself comes down, shakes everyone's hand, and says, "This is what I will do and this is what I will not do."
If this is about ideas, fine, let's talk about ideas. If it's about character, fine, let's talk about character. If it's about the numbers, let's talk numbers. But if this really is just a pissing match, not between Nutter fans and Fattah fans, but between YPP and the Nutter campaign -- which isn't even here to be pissed on or to piss -- then we're just wasting everyone's time.
Supporting Michael Nutter for Mayor.
Ok, one question of logic resolved
You're saying that a balanced budget constraint amounts to a failsafe. Fair enough.
But given Nutter's position in the polls, and his "reform" platform, it seems to me that he would benefit from gaining more advocates within the progressive community. While the number of people who would be reassured by Nutter addressing these issues in a more proactive way might be small, he doesn't seem to be in much of a position to be all that choosey.
I see some reasons to prefer Nutter over the other candidates. But it is pretty striking that he feels so comfortable advocating some policies that are very similar to a Republican Party platform. Given that he has to gain more supporters, and that it seems likely he'd gain more than he'd loose by providing some assurances that he isn't an ideologue or motivated by loyalties to those who might benefit disproportionately from business tax cuts regardless of their impact on the larger community, I don't understand what he's waiting for.
What's up with that? Am I not worthy of voting for him?
You're saying that a
Not really. A failsafe says the BPT must be raised. The balanced budget constraint says something must be raised, but doesn't specify that it must be the BPT.
I want to clarify my take on property taxes. I'm not necessarily in favor of raising property taxes, but think that doing so would be better than raising the BPT or wage taxes. I am open to other ideas.
Is Godwin's Law applicable here?
I don't know why he hasn't run commercials yet. He is busy campaigning. He may address the questions; he may not. Not doing so at this point does not necessarily imply the "disturbing possible reasons" that you suggested. It does seem to me that Nutter is held to a higher standard. It seems to me that this level of detail is not demanded of any other candidate. I don't think he has released a detailed budget plan. He may be better off not doing so. However, the election is almost 3 months away. Don't start saying that Karl Rove supports Nutter just because he hasn't addressed every detail yet.
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I support Michael Nutter for Mayor.
Does Godwin's law apply
to repeated cries that those who question Nutter's policies or actions "are out to get Nutter" or other accusations of that ilk. Like we're holding him to a "higher standard"? The man has been laser-focused on this issue for years. How is it inappropriate to point that out? It's just not true about the others. Period.
Lessons Learned
Thanks to Stan, today I have learned what a Hobsons choice is as well as Godwin's Law.
Voting for Stan Shapiro and Manny in 2007!!!
Don't know nobody named Goodwin
I get this:
I think you misread my comment. I meant that you're saying that a balanced budget constraint is a failsafe against a revenue shortfall, whether it is caused by BPT cuts or other factors - and having that kind of failsafe is my concern. I am not particularly wedded to the concept that the BPT needs to be the source of ensuring a balanced budget.
If addressing a shorfall can be better attended to by alternatives to rasing the BPT again, I have no problem in the abstract to that idea. Still, I'm distubed by folks who, as you have done, rule out increasing the BPT as a consideration for dealing with potential revenue shortfalls. And I'm concerned that Nutter would be in the same camp.
I was just reading about the high business tax rates on small businesses in NYC - "the fourth-worst business-tax climate in the country" -- the reason being that providing social services in NYC is very expensive. That tells me that the "cutting the BPT is necessarily the best way or a prerequisite to promote economic growth" philosophy is too simplistic. I want to see that Nutter has a more nuanced evaluation.
And then there's this:
Hmmmm. Does that mean that having a high tax burden prevents growth? Obviously not in the case of Phoenix, huh? Sorry for going back to the BPT debate - but when I read that stuff I still want some assurances and not ideologues.
As for the Goodwin's law stuff -- that's a low blow.
I'm not making these concerns up out of whole cloth. I'm not calling Nutter a Nazi. I have a fundamental disagreement with the philosphy that cutting taxes necessarily results in a better economic climate, and I'm looking for reassurement that Nutter doesn't subscribe to such a philosophy.
I don't "hold Nutter to a higher standard." In fact, I'm looking for a way to vote for him precisely because I have deep concerns about each of the other candidates. If you can't stand the heat.....
Apologies
It was intended as humor. I meant no offense. I was making a joke about how bad it is to call someone a Republican, or even soft on Republicanism.
As for the BPT failsafe, my understanding of what Dan was asking about was a provision that would undo a BPT reduction in certain circumstances. Whether the BPT should be reduced is a separate discussion.
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I support Michael Nutter for Mayor.
No offense taken
I just wanted to be clear that it doesn't apply, and claiming a low blow was a good rhetorical device.
And you've convinced me that a failsafe requiring undoing BPT cuts wouldn't be necessary. However, on the other hand, making BPT cuts permanent, or raising the bar for undoing BPT cuts so that it would be more difficult than taking alternative measures for dealing with a revenue shortfall, would seem unacceptable also.
Tax As Means/Tax As Ends
Dan U-A writes:
I agree with most of this. Certainly, you don't want tax cuts or tax increases to have a net negative effect on revenue or on the economy. (Unless you're a Republican lobbyist, in which case, tax cuts are just plunder.) They have to be part of an overall budgetary and economic plan.
On the other hand, though, I would rather not give up any notion of tax fairness -- the idea that one scheme of taxes can be inherently more or less fair or just than another. Usually, when progressives praise a progressive tax structure or blast a regressive one, they're appealing to some notion of tax fairness. It seems wrong, regardless of the consequences, for people to have more but pay less.
Imagine a universe where die-hard supply-side economics actually worked -- where you only flat-taxed wages and non-luxury sales, and this turned out to generate a huge amount of wealth, revenue, and jobs. Even if you had 99% employment, this would still seem unfair, since the people on the top would be paying a much smaller portion of their total income than people on the bottom.
I wonder what John Rawls would say about that one.
You'll never find, as long
You'll never find, as long as you live
Someone who loves you tender like I do
You'll never find, no matter where you search
Someone who cares about you the way I do
Oh wait. That's Lou Rawls.
Your candidate
today seems to be shocked, shocked to find after the Mayor's budget address that the budget is a bit stressed. It leaves him with "serious financial concerns for the future of the city" to which his answer seems to be: nada. Then he claims that the Mayor had been on a "spending spree" in recent years. Well, Nutter voted on all of those "spending spree" budgets all of those years, and I don't ever remember him calling for a spending cut on anything, although he did often intervene to insist on retaining librarians, rec centers and fire stations, along with their attendant staffs. And often ridicule the mayor's previous statements that budgets were tight.
And also, btw, in terms of increasing real estate taxes as an alternative, which I personally think is an appalling choice given all the poor homeowners we have in town and all of the gentrification going on, Nutter is against that too. He introduced bill after bill a few years ago, and supported others as well, capping all such increases. And he has proposed another in this campaign.
The truth that no one wants to face is that we are slowly being starved by other governments and are being left with a Hobson's choice: either slowly starve services, or leave the regressive tax system in place. Unless we get our collective acts together and decide we're not going to be treated like animals anymore by the state, suburban and federal governments, we're going to continue to be divided and conquered by this fruitless debate.
Stan, the last paragraph of
Stan, the last paragraph of your comment is . . . fantastic! We need better and stronger leadership in a lot of these positions, particular our state delegation.
Supporting Michael Nutter in 2007!
Yes, but
that doesn't leave Mike Nutter off the hook. He's not showing that leadership, just pandering, by calling for spending more, taxing less.
I'm not saying it does. I
I'm not saying it does. I was just paying you a compliment related to that paragraph.
Supporting Michael Nutter in 2007!
And I appreciate it
Stan Shapiro
Or isn't the better question
Or isn't the better question "what are we getting for being #1 or #2 most taxed city in the US?"
We can argue that we need more services and it can argued we need to be taxed less.
Fundamentally, the problem is not what we pay in taxes. It is what we get for them. As NY is an example, you can tax a lot and as long as people reasonably think they are getting their money's worth, it doesn't affect life. Businesses and people pay the tax of getting those services.
So, what do we do in Philly's position where no one agrees we get for what we pay?
1) Keep taxes the same and hope the same politicians that have been mismanaging funds change their ways (because we know, unless something odd happens, we may have no more than 1 or 2 different people on Council than sit there now).
2) Lower taxes to force more fiscal responsibility (even though we know it will just mean services will be cut, not made more efficient)
3) Or find something in the middle (which is just hard getting people on this forum to agree with)
That is really the crux of it all. Our current government is grossly mismanaged and defunct. There is no other explanation. We are top for taxes and bottom for services.
THAT is what pisses a lot of people off about taxes.
Hey Stan, it looks like you and Nutter agree!
Check out this press release they put out today about funding from other Governments:
NUTTER: MAYOR LEAVES MONEY ON THE TABLE
Street Administration Fails to Pursue Funding
http://www.nutter2007.com/index.php/release/money_on_table
I support Michael Nutter for Mayor
Sounds great, although
I don't know how real that $500 million figure is. But, by all means, it's a great idea to focus on getting the money. And now I'm expecting that Nutter will call for a postponement of his call for sharp tax cuts until the new money rolls in and we can afford them, along with all the service improvements he wants.
Ain't Gonna Happen, Captain
Stan - I think that the essence of what you're asking Nutter or his supporters to say is that we don't have faith in his ability to be a responsible Chief Executive, that he won't appropriately balance competing policy interests, that he won't balance the budget, that he won't find efficiencies in government, and that he won't pursue additional revenue opportunities (like raising fees and fines, pursuing a market-based revenue opportunity program, going after tax cheats and scofflaws, implementing RecycleBank citywide and hopefully saving close to $17 million annually, or capturing property tax increases).
Captain schmaptain
As I've said all along, the proposed BPT cut is a faith-based initiative. But to you it seems it's not about faith in the policy, it's about faith in Michael Nutter. Unfortunately, Nutter has no crystal ball. Every year in putting together the budget he would have to forecast the revenue that will be coming in the next year and the next five years. He will have no way of knowing what the effect of sharply cutting tax rates will be, yet if he proposes such cuts again, he will have to come up with a number. If he assumes growth that's not there, he, and we, will be headed toward a big fall. He puts his pants on one leg at a time and will have to make a guess, like everyone else. And that guess will be based on an unproven philosophy.
And we know how he sought to apply his philosophy as Councilperson. He didn't propose offsetting revenue gains against the revenue losses that would be expected by everyone, in the short run, from tax cuts. He just proposed the tax cuts. And to lock them in for 15 years. While fighting property tax increases. Will he be more responsible as mayor? Personally, I'm not interested in finding out.
No Crystal Ball or Sorcery Required
Stan - Mike Nutter will balance the budget and make sure that revenues are maintained, whether it be through tapping additional revenue sources (as I've mentioned above) or through generating efficiencies in the government. It's not so much "faith" as it is confidence that Nutter and those he attracts to his administration will run the place well and balance competing policy interests so that that the City moves forward. In the end, we do have to agree to disagree on one thing - you don't think that a tax reduction program constitutes a budgetary priority that is "funded" or "spent" the same way any other program is, while I do.
Did Councilman Cohen propose "offsetting revenue gains against the revenue losses" expected to be created by his low income wage tax reduction program? Did Wilson Goode do this with his BPT diversion program for CDC's? By the way, I support both of these bills. Do Council bills that require programmatic expenditures typically include an "ability to pay" or "sources of funds" component? I don't think so.
Maybe on another thread, we can all get into Fattah's plan for selling the airport and creating a new super nonprofit to save the City. You seem to have a lot of faith in this plan and there are certainly no guarantees that it's even feasible (the airport selling move) at the price stated and the implementation piece is almost totally devoid of detail and does nothing to establish a baseline of service or service delivery infrastructure. Also, you don’t seem to be concerned about the 250 or so City of Philadelphia employees who will lose their jobs if the Airport is privatized.
I do believe tax cuts need to be funded
In fact I thought that's what this whole debate was about. Nutter did *not* propose any funding proposal for tax cuts when he was in Council. Just the tax cuts. You say he would do so as Mayor. I see the record and am not interested in taking the risk. That's our difference.
As to the Cohen tax cuts, they were to be phased in over a period of six years, starting 3 years after they were adopted. Furthermore, it's a refundable tax cut requiring an application process. It's well known, though regrettable, that there's a very low participation rate in such programs. So the revenue loss would probably have been far less than estimated. Plus, that cut had important social benefits, i.e., putting money in the hands of people who desperately need it, that BPT cuts don't. Finally, down the road the Cohen tax cut would force a choice: target tax relief to those who need it and would spend the money in neighborhoods, vs. target it toward those who don't need it at all, or much less, and would spend lots of it on dividend increases.
I haven't, in fact, backed Fattah's airport plan because I don't know enough about it. But it does say to me that he intends, one way or another, to expand the pie in order to fund his priorities. Which also happen to be my priorities. And to do so in concrete ways, not by hoping cutting revenues will produce more revenues. To me, that puts him a step up -- a giant step up -- from the other candidates. And that's why I'm leaning strongly toward supporting him.
So the answer is "no"
So the answer as to whether Council expenditure (or "revenue division" or "tax cut") bills typically have offsets is "no", right? You didn't say anything about the Goode BPT diversion bill, maybe the Councilman can chime in on that one. Just want to reiterate; the standard that you're applying to Nutter's legislative efforts isn't typically one that is applied?
You say that the low income wage tax elimination bill had "important social benefits". I agree. I supported it and still do. Many folks think that the BPT has important symbolic and real benefits to our economic development and job creation efforts. We just disagree on that one.
The airport plan? Let's all talk about it together on another thread. I will say, I'm pretty surprised that you seem nonplussed by a privatization plan that probably involves the laying off of 250 City employees (who might lose significant pension and benefits as well) and that doesn't say anything about the thousands of people currently working in the arena that the "opportunity agenda" would touch (from the City, School District and nonprofit sectors) and the billions of dollars that are currently being spent in these areas. Where's the baseline? Where's the detail? Maybe I'll start that one later today.
Linkage
Stan - when Fattah proposed a spending program in Congress or the State House, did he typically identify a revenue replacement source? Has he evidenced a record of being a responsible budgeter?
As Councilman, Nutter
As Councilman, Nutter proposed reducing the BPT in a number of different ways. It's worth looking at some of these proposals individually.
Nutter attempted to eliminate the BPT in summer 2004. I'll try to find more information about this bill, which was vetoed by Mayor Street.
In May 2005, Nutter proposed to incrementally phase out the gross receipts and net income portion of the business privilege tax by 2017 -- essentially extend the so-far-successful approach taken to the wage tax and GR portion of the BPT. The cuts were softened in the first five years, with deep cuts scheduled to occur in outlying years. Council would also get to vote in five years on whether to continue the incremental reductions, which would ultimately phase out both portions of the tax by 2017. The council vote was an explicit failsafe to block the cuts in the event of a revenue shortfall. This bill was also vetoed by Mayor Street.
In November 2005, Nutter introduced legislation to incrementally reduce the net profits portion of the wage tax from 6.5% to 6.4% by 2011. Nutter used figures from the budget to peg the cost of this tax cut at around twenty million dollars over five years. This legislation -- much less sharp than his current mayoral proposal -- was also vetoed by Street. (Or at least he threatened veto -- I don't have a news article saying Street actually vetoed it.)
So it is not accurate to say that Nutter simply supported eliminating the BPT and praying for rain. A good deal of the May 2005 bill came out of amendations by the council, but was sponsored and supported by Nutter. Council members James F. Kenney, W. Wilson Goode Jr., Frank DiCicco, Marian B. Tasco, Frank Rizzo, Brian J. O'Neill, Jack Kelly and Council President Anna C. Verna and Nutter voted in favor of the amended bill. Council members Jannie L Blackwell, Darrell L. Clarke, David Cohen, Joan L. Krajewski, Richard Mariano, Donna Reed Miller, Blondell Reynolds Brown and Juan Ramos voted against it.
This series also shows that Nutter has shifted his strategy for reducing the BPT in the past, as legislative and budget realities permit. I wouldn't deny that Nutter probably thinks it would be a good thing if the city could eliminate most or all of the BPT. But that's not what he's proposing now, and he hasn't proposed anything of the kind for at least two years. And unless city council fundamentally shifts in how they want to structure revenue, I doubt he would propose anything like that as mayor, unless suddenly the city were awash with funds they could use to introduce a full phasing out. Maybe that's something for the reelection campaign. :)
I think the structure of the summer 2005 bill -- a slow reduction in the gross receipts BPT, with a council vote to re-authorize in five years -- would probably be the best approach. I think it would likely get a majority of council again. And Nutter is proposing a gradual reduction now -- not even a total phasing out, but a reduction to the level of the wage tax. I don't know if there's a reauthorization provision or not.
But look at Nutter's record on the BPT. He has been flexible. He has been responsible. And he's been committed to this issue, which everyone else in the campaign has jumped on after years of resistance from the Street administration. And I haven't heard a single person yet stick up for this tax.
What is to prevent Fattah or Brady or Evans or Knox or anyone else from getting elected, convening a committee to "study" the BPT for a year or so, deciding there's no reason to give up a sure revenue stream, especially if it lets you do other things you want to do, and coming back with nothing or next to nothing? Or proposing an increase in gross profits so steep that council votes the change down, and the new mayor can say "Well, I tried." Nutter has more credibility on the BPT than any other candidate. And to imply otherwise is six kinds of wrong.
Perpsective
He has more credibility, if you believe that slashing the BPT is the best course of action. I do not.
(And, in fact, when Brett Mandel was interviewed with Marc Stier on WHYY- Marty Moss-Coane kept asking whether this is really the best thing. His response was "it is the best thing Council can do tomorrow." In other words...)
Anyway, here is the point: I disagree with him on this, so, he does not get "credibility" with me, he gets skepticism. I think the risk for what he is proposing is much higher than the reward. But, I like some other things Nutter has done. And, if Nutter has any chance whatsoever, he is going to need the vote of just about every progressive around, right? And if he is so sure that this would work, how could some kind of trigger be so problematic?
Well, virtually all of the
Well, virtually all of the other candidates have come out in favor of eliminating the gross receipts BPT. I doubt that some of the other candidates will actually follow through and do it. I think Nutter will. That's what I mean by credibility. And if you have problems with that position, you have problems with more candidates than Nutter. Everything proposed is risky. And I think many people would support some risk, after years of the Street administration refusing even to hire more police officers to save money.
Until we know what dollar figures we're talking about, it's impossible to say what's being risked and what the rewards would be. Let's get the numbers on the table.
You keep bringing up the "trigger," but I'm not sure exactly what you're looking for. The Nutter supporters on this blog -- and I don't think anyone is speaking for the campaign -- have mentioned gradual phaseouts, with reauthorizations. I think everyone has rejected an automatic repeal, triggered by budget numbers. Many people have mentioned ways the tax reduction could be paid for in the budget -- through serious collection policies, expansion of the recycling program, and floated ideas about changing the way property taxes are collected. At least among the Nutter supporters, there doesn't seem to be anything problematic about it. And the bills that the councilman proposed since 2004 all built these "triggers" into the proposal. What are you looking to hear?
It looks like I'm... Supporting Michael Nutter for Mayor.
Here's what I'm looking for
(1) Aardhart pretty much convinced me that a "fail safe" may not be necessary - except if BPT cuts are "locked in" in some way - meaning that raising the BPT again wouldn't be on the table if necessary. So, that's one thing I'm looking for: no "guarantee" there. It's a bit hard to follow all you tax/budget geeks - but I'm not getting that from what I've read about Nutter's policies.
(2)I want to have some reassurance that Nutter isn't ideological or influenced by a particular set of stakeholders with respect to business taxes. From what Stan has been saying about his experience with direct interaction with Nutter, I have to question that and can't take it on faith. I trust Stan's judgement. Your description of Nutter's history with the BPT on Council certainly shows his actions in a different light. Still, I would like to see more evidence.
If Nutter took some steps to provide concrete reassurances, I'd feel more comfortable about voting for him. Obviously, that's only vote - but as as Dan says, what does he have to lose by reassuring at least some folks? Nothing as I see it - unless, in fact, he is blocked by ideology or allegience to a particular group of stakeholders that will beneifit disproprionately from cutting the BPT and that doesn't particularly care about the affect on the larger communty
(1) I know of no way for a
(1) I know of no way for a city law or budget to be passed in such a way as to make it impossible to repeal. I don't understand your first concern.
(2) Nutter thinks that the BPT is too high. I think most Democrats think the BPT is too high. I think most Republicans think the BPT is too high. Does this mean Nutter is a Republican? No. (It means Nutter is smart enough to realize the obvious.) Nutter served in city council for 14 1/2 years. He has been independent. He worked to improve his district. I believe that he is running because he believes he is the best candidate to improve Philly. I agree with that. I do not believe that he is going to be the frontman for some evil puppet-master. I have seen no indication that he would ideologically ignore the effects of policies. I don't understand or share your second concern.
I don't trust Stan's judgment. Stan strikes me as an ideologue that opposes any tax cut that would directly benefit anyone who is not poor, and who denies that Philadelphia's excessive taxes have negatively impacted it over the last 50 years.
EDIT: If you want to get a better sense of what Nutter believes and if he is an ideologue, watch all the video of his on YouTube, watch the forums, I assume that he will speak within a mile of your house a few times before elections, go see him and ask questions.
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I support Michael Nutter for Mayor.
I think the BPT is too high
and would like to reduce it for small business, but not Comcast, Walmart, Sunoco, and others who don't need it in the least and who are not getting up to go. But I would like to have replacement revenue for what we give up. If that makes me an ideologue, so be it.
The lock is that it may require 12 votes for repeal
Once you put yearly tax cuts into the Code, you need the mayor to reverse them. If you have a mayor who doesn't agree, you need to override his/her veto. That requires 12 Council votes. Even if all 17 members are not present. So enacting multi-year cuts in one ordinance doesn't amount to a lock, but it sets up a damn big hurdle to any effort at repeal or even delay. Not to mention the hurdle that comes from all the big biz types who will be ready to bury you for the heinous crime of increasing a business tax. Because you can always cut some waste, fraud or abuse. That will never go away.
Same as any other bill
The twelve votes is the same number of votes needed to pass any bill opposed by the mayor, right? So there isn't any real special "locking in" here, right?
But if you don't like even the locking in of multi-year cuts, let's look at other options. Let's suppose there was a tax that was too high, and we wanted to reduce it. Some groups opposed the cuts, most favored it. Let's say the tax was at 5%. (The BPT never quite reached 5%, but I like round numbers, and this is a hypothetical, not the BPT.) Let's say that after much negotiations and stuff, it was decided to reduce the 5% tax to a 3% tax. The options:
1) Do it all in one year. There will be some difference in the amount of economic activity in the city between the first year, but there won't be an increase of 40% in one year. This means that if it is implemented in one year, there will be a significant drop in the revenue from that tax. Even if there is an increase of 10% (a huge jump in one year achievable only in hypos) of the taxed economic activity because of the tax reduction, cutting the tax will lead to a decrease in revenue of 34% from that tax. This might be too much revenue to lose in one year. Too many city services would need to be cut.
2) Schedule it out over several years. Make it over 10 years. 4.8%, 4.6%, 4.4%, etc. This will allow businesses to plan their budgets, forecast whether the move to Camden is worth the moving expenses considering that in ten years, there may not be the savings. Allow businesses to forecast whether they can open a store in Philly, etc. This would impact city revenue, but not as drastically as a drop in a single year. Revenue from this tax won't drop precisely 4% a year because the economic activity won't be the same every year. Revenue might increase if economic activity increases enough. (4.8% of 105 is greater than 5% of 100) Revenue can also be recovered through other taxes on the increased economic activity. (Although this tax is a large part of the tax burden, there are many other taxes on economic activity.) Of course, Stan will call this scheduled reduction a "locking in."
3) Reduce it to 4.8% for next year only. Remember, it took lots of negotiation to decide on 3%, some groups oppose the tax cut, and many groups favor the tax cut. This is not only a pain, but it is not as beneficial for growth. Businesses are choosing between Philly at 4.8% and Camden, not Philly at 3% eventually and Camden.
4) Not cut the tax.
I don't see any other options. If it is decided that cutting the tax is what we want to do, option 2, a scheduled reduction, seems like the best option.
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I support Michael Nutter for Mayor.
Can't sit by this computer 24/7
and I've got to run, but my main answer is yes, there's a logic to phased in tax reductions, but if you're wrong about the impact -- and as has been pointed out before, it may be tough to tell -- you need to overcome both the possibility of a veto and massive political opposition to reverse course. It may be true that 12 is always needed to overcome a veto, but so what? In this case, you've got that obstacle, and the political one, each and every year that you may want to change course. If you have a trigger device incorporated in the original legislation -- that delays or reverses the cuts if specified revenue targets are not met -- then you don't have those obstacles.
Reversal bad, delay...maybe
Stan, You make some good points (without hyperbole). I would still oppose a failsafe reversal clause. I'm more agnostic about a delay provisions or reapproval requirements. I can still see reasons to oppose them, but I see advantages to it as well.
I view a lot of this discussion as how you want the deck stacked, which side you want the procedures to favor. Those that oppose a tax reduction (or any change) would favor lots of obstacles to that reduction and plenty of opportunity for repeal, and vice versa.
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I support Michael Nutter for Mayor.
See, this is where you lose me
As with the thread you just put up. I think that you are mischaracterizing the debate.
I do not believe that Stan "denies that Philadelphia's excessive taxes have negatively impacted it over the last 50 years," but that he has correctly said that it is very, very difficult to quantify to what extent they might have. In fact, while Stan does defend himself against pretty flagrant attacks by going just a tad overboard himself at times, (ok, and maybe even just goes a wee, tiny bit over the line without provocation on the rare occassion), he has also consistently acknowledged that the BPT should be restructured -- and he has consistently allowed for the fact that cutting the BPT might actually in balance increase revenue.
But many of the Nutter supporters consistently seem to fail to recognize what Stan does say. Why is that? One possibility is because their allegience to Nutter is stronger than their desire to look at the situation objectively.
And Stan has also consistently said is that it is playing with fire to assume that cutting the BPT will have a positive effect, and contingencies should be carefully constructed. I agree.
He has also said that Nutter has been fanatical. Given that from knowing Stan, I trust his judgement there, what should I think? But Nutter could remove questions about his fanaticism or loyalties if he chose to do so. He could say that depending on what happens, he well recongnizes that any of the cuts he's promoting might need to be reversed, and further, he could demonstrate that he has contingency plans outlined - including the possibiity of reversing any BPT cuts - or at least commit to making contingency plans.
So, my first concern: he could make it clear that he doesn't view the BPT cuts to be "guaranteed," but contingent on what happens with revenue.
As for my second concern, I'm always skeptical about any politician having a different motivation than what they state to the public. Sorry, that's the way I'm built. I listen to what they have to say, but I also look for what it is that they aren't saying. He's not saying anything yet that convinces me that he isn't being driven by an over-the-top belief in the stimulus of cutting taxes, or by allegience to particular stakeholders. Sorry, Stan's observations have me looking for such reassurance. It wouldn't really be that hard to provide. So, if it isn't forthcoming, I'll be asking why.
Honestly, I think that you're making the debate more ideological than it needs to be - and that was my sense from reading your other post. I think that you're interested in the economics debate; hey, I find that debate interesting too - but you are confusing my questions as being a rhetorical part of that debate. They aren't. And your tendency to indicate that my questioning Nutter's platform is calling anyone that questions the benefits of high taxes a Republican doesn't particularly dispell my sense that you're making this more ideological than it needs to be.
Good post, and you make good
Good post, and you make good points. I've never met Stan. I judge him purely on what he writes here. I think he has repeatedly mischaracterized things, such as I pointed out here, here, and other places. I get frustrated at him, and may make this more personal that it should be. Maybe each side unfairly views the other as fanatical, but the true way to judge would be just to listen to their side.
Stan, I apologize for mischaracterizing what you believe. It does seem to me that you either deny or excessively discount the effects that taxes have in Philadelphia. I have posted about this denial, and won't go into this disagreement here.
I do have a high opinion of Michael Nutter, and less so of all the other candidates. I have never heard Nutter say anything that didn't sound reasonable and intelligent. As I posted, there is plenty of opportunity for you to also decide. I don't speak for Nutter.
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I support Michael Nutter for Mayor.
Nutter tried for a flat BPT repeal at least twice
This can be spun any way anyone wants. But Nutter was virtually fanatical about his mission to eliminate the BPT. He retreated only because he had to, once his support in Council began disintegrating. He gave no indication whatever, that I'm aware, that he actually came to believe a bill that required Council renewal of tax cuts after five years was better policy than all-out repeal.
And, as pointed out before, he's distributing flyers bragging about his efforts for full repeal. Now, in 2007 as he runs for mayor.
Yes, he was flexible when he couldn't get what he wanted. That tells us nothing about what he wants and will pursue once he has the power of the mayoralty.
I posted the bills before that Nutter pushed calling for full repeal, no ifs ands or buts. If people want to further debate history, I'll do it again. But trust me, Nutter was an evangelist for full repeal and never repented.
Is Councilman Goode's word good enough?
This is what Councilman Goode wrote, on YPP, last month.
And:
Then, citing reasons why, if Nutter were Mayor, he wouldn't be able to just force through a full repeal:
Then Friedman wrote:
Then Stan, you wrote two very interesting things:
Then in response to Councilman Goode:
Well, now Nutter has stated publicly that he's not for "elimination of the whole enchilada." In fact, he's made it a campaign promise. His position now is the one that you called "nice and reasonable." We have a convincing conversion story that Nutter came to his present position with the help of Councilman Goode -- perhaps we should call this the "Goode/Nutter" plan for the BPT. But you still say, "Nutter hasn't changed his stripes." "That tells us nothing about what he wants and will pursue..." I honestly don't know what else the man, his campaign, Councilman Goode or anyone can do to convince you otherwise.
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Supporting Michael Nutter for Mayor.
Jeff, I guess I don't get
Jeff, I guess I don't get this. I understand that as his suppporter, you believe he will do the right thing.
But, you aren't enough, right? Nutter is not exactly winning in polls. So, again, I guess this seems like a very easy way to placate concerns that voters have, like me. I know you trust him. But, if you trust him, and his policies so much, then why wouldn't this be OK with you? By your account, won't it be irrelevant anyway?
The "Fail Safe" Concept?
Would the "fail safe" concept placate you, just to be clear?
Will it alone make me vote
Will it alone make me vote for him? No. Would it make it easier to vote for him? Yes.
IMO
Ok - I understand. And I'm certainly not speaking on behalf of any campaign or candidate; my opinions are based upon my own professional experience. While the "fail safe" concept is certainly decent political rhetoric, it's not a concept that I've seen employed in the city and county governments that I’ve worked for. There are no "fail safes" on the expenditure or the revenue side of the budget ledger; there is responsible budgeting and management.
I've never heard Mike Nutter say that he wanted to starve government by progressively reducing its revenue. I've heard him talk about tapping other sources of revenue and making government more efficient while continuing to move the City forward by funding important programs and investments in human capital.
What if he said something like, "under my tenure, I will work to increase the City's net revenue annually through a variety of mechanisms, including but not limited to the following: seeking more funding from the state and federal government, pursuing a market based revenue program, increasing fees and fines appropriately, going after tax cheats and scofflaws, implementing RecycleBank citywide and saving upwards of $17 million annually, and finding other efficiencies in government".
Actually, the mechanism is called a "trigger"
And it has been proposed and actually enacted in at least one locality, which at one point I knew, and now can't recall. It works by putting in place a tax cut schedule which gets interrupted, though not necessarily reversed, if revenues don't come in as expected. It was also widely proposed in connection with the Bush tax cuts in 2001, although not enacted. Google "tax cut trigger" and you'll come up with lots of articles.
As to your proposal, for me, it's not enough. One needs to have the revenue in hand, or assurances that it's coming, before cutting the tax. Hoping for revenue from state and federal governments, for instance, is hardly a way to responsibly budget. What is a "market based revenue program?" It hardly sounds like a rock solid source of revenue to me. In general the policy should be: solidify the revenue source. Then spend it. Not the other way around.
Yet, you have confidence in
Yet, you have confidence in Fattah's airport idea and you don't even know if it can or will work? The experts say that it won't work?
So where is Fattah going to find the money for his BPT cuts? He did not condition it on selling the airport.
Umm, Fattah is shifting the
Umm, Fattah is shifting the gross receipts tax to a larger tax on net profits.
The Airport is to fund his new social programs.
Question
So will he only implement those new programs once he has dedicated funding in the form a final lease agreement on the Airport? Because those types of agreements don't happen overnight and aren't always successful. The Inquirer article on the deal implied it could take years and we would have to find money to upgrade the Airport to make it marketable first.
I'm not asking this to be cute or to attack the Fattah camp - I'd honestly like to know. I'm surprised Dan's not asking for a failsafe on the Airport funding before Fattah starts spending the massive amounts of cash it will take to fund his programs.
That is my issue with
That is my issue with Fattah's plan. It is dependent on something that 1) may not happen or 2) may not happen for years.
What is his Plan B for the social issues he is proposing?
Stan?
Stan - when Fattah, Evans, or Brady have proposed (or voted for) spending programs in Congress or the State House, did they typically identify a specific revenue replacement source? Have they all evidenced records of being a responsible budgeters?
Are you telling me that in your three decades in Council, legislative proposals that directed City government to spend money always identified a specific revenue source? Seriously?
Also, on Fattah's airport plan - are you not concerned about a privatization that would strip 250 City workers of their jobs and might possibly put their pensions and benefits in jeopardy?
These are not rhetorical questions; I'm interested in dialog.
Market Based Revenue Opportunities
From the revenue section of last year's Five-Year Plan:
"Preparing to implement strategic marketing partnerships. The City is currently working with a consulting team to develop a citywide strategic marketing plan to maximize the value of private partnerships and increase revenue for City programs. Partnerships have the potential to take a variety of forms, including sponsorships, exclusivity agreements, and leasing of City assets. Preliminary estimates by the City's consulting team support a revenue projection of $22.5 million from FY07 to FY11."
Good questions: way to cut to the chase, Dan
Will the campaign respond? Please let us know if you are speaking on behalf of the campaign. Interestingly, I'm reading this book about Bush's first Treasury Secretary, Paul O'Neill, and one of its themes is the secret pact he made with Greenspan to try to tie the Bush tax cuts to economic triggers.
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BradyDale OnLine
The R.I.I.C. Blog
The Philadelphia Unemployment Project
Has Michael Nutter or anyone
Has Michael Nutter or anyone from his campaign ever posted on here?
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I support Michael Nutter for Mayor.
A history of responsible budgeting
I think Michael Nutter has shown a history of being a responsible politician. He proposes sane policies whether we are talking about finances or public policy.
I'm not against a fail safe mechanism. I don't think anyone is but I think it's an imaginary complaint. Philly is required by law to have a balanced budget. The great majority of city services are necessary. Hence, any responsible politician, as Nutter has shown himself to be, will make smart and responsible choices even if that means delaying a tax cut for a year or two should that be necessary.
I think the point about real estate taxes is also asking the obvious. With the real estate reassessment, a lot of people will be paying more taxes. Making sure the process is fair and uses market statistics rather than political wagging of rates in difference neighborhoods is imperative. Anyone who gets elected will be raising real estate taxes, at least on better neighborhoods.
The primary issue I have to definitive answers is that they are putting the cart before the horse. We have to figure out how well the city is using its current resources before deciding whether more resources are needed.
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Supporting Michael Nutter for Mayor.
Well, he has changed his
Well, he has changed his position, right, from full elimination to this. So, that indicates that maybe he was wrong, before? And, he could be wrong again?
Again, if you truly believe in it, this seems like an easy step.
Now- I do agree with your final point. As Gaetano has said, as well- we need to fully asses everything that is going on in City Government before we make decisions like this.
Or it could be that he knows
Or it could be that he knows he can't get everyone to agree on what he wants to do, so he is taking the stance that he can get people on board with. Hard to say why he has changed his view unless he says so. The closest we have is Councilman Goode saying he talked Nutter down from fighting for complete elimination, so, it could be convinced otherwise or just a political concession.
Nutter's position when he
Nutter's position when he pushed for elimination of the BPT must be seen in light of the Street administration and Council's resolve not to ask hard questions or demand accountability from government.
Generally, I think that this as Stan said, this is a fruitless debate and has more to do with a need to find fault with Nutter than it does to do with actual public policy choices and options.
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Supporting Michael Nutter for Mayor.
Nope
I disagree- it is about whether this is blind faith or not.
I think I have been pretty fair to him, and continue to be fair to him, and it seems like a fairly easy answer.
A fail safe is as good as a lock box
Social Security is in a lock box. Doesn't that make you feel better about the future of our country? And people wonder what's to be gained by claiming they'll have a fail safe?
The Mayor and Council's job is to plan and legislate each year depending on circumstances. A fail safe seems pretty meaningless to me. Lots of people can provide empty promises. Ruby Legs said it best--some other candidates need to be held accountable for empty promises.
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Supporting Michael Nutter for Mayor.
Nope
Way to repeat the GOP frame though. When Gore talked about a lock box, it was a pretty simple concept- he would use the surplus funds that were then coming into the US treasury, and divert them specifically for shoring up social security.
It didn't happen. Instead, we got tax cuts for the rich.
Again, saying you want no failsafe is saying to me you ideologically believe in that corporate taxes would work. Sorry, that doesn't fly with me. If you are so sure, why wouldn't you want a failsafe? Since you are right, it costs you nothing?
Look, Nutter is a long shot to win, right? He needs everyone in the progressive community, times about 8. Seems like this is pretty easy then.
Why do you keep coming back to tired arguments
about how people are trying to nail Nutter? Has anyone made something up about him? Are there lies being told here? We're just talking about his record. And it's totally fair and proper to weigh what you've done in evaluating the trustworthiness of what you say.
As to Council and Street's refusal to ask hard questions, how does that explain Nutter's continued pressure for increased services while in Council while he relentlessly pushed his tax cut agenda?
And it is a fruitless debate, but it's one that's largely been spurred by the tax-cutters who have insisted it can be resolved with no pain, no fuss, no muss, just tax cuts.
Begin to discount what I will say
because I, shockingly, don't support Michael Nutter for Mayor. But I'll add a question to the mix: How can you view Nutter as so responsible when the legislation he pushed as hard as anything in his political life would have put the cuts in place for 15 consecutive years regardless of budget realities? It's true that every year Council has to pass a balanced budget, but that doesn't assure in any way, shape or form that it will make the right choice between a cut in services and repeal of a tax cut. The defense that Council will do the right thing in case of a problem has been made all along the way; but assuming Council might repeal some part of a tax cut, do we know this is going to be true of unknown Councils (and unknown mayors who would have to sign a rollback) for 15 years? Indeed, right now, the pension system is way underfunded, so is the School District -- which had its crisis merely postponed a few years ago to ease in the state takeover -- and Community College is about to be cut by $1 million. And everyone says we need 500 to 1,000 new cops. How likely is it that any of the previous tax cuts are going to be reversed in this climate to accommodate those needs? Answer: 0 Is Nutter calling for a reversal? Answer: No Is he showing us how he would pay for any of those things? Answer: No. There will be no reversal of tax cuts because they are now sancrosanct and unassailable.
And btw, as to Nutter's supposedly modified position on the BPT, this is the text of an email I received from Lance Haver a few days ago about a flyer he was handed by the Nutter campaign:
The Flyer has a picture of Nutter and is titled: "On the Record: Excellence in Public Service"
(I saw the Councilman standing next to his staff as these were being given out, so the argument that he didn't approve what they said is not relevant)
Under the section titled: "Relieving the Tax Burden for Resident and Businesses"
"Fought for the ELIMINATION OF THE REGRESSIVE BUSINESS PRIVILEGE TAX (BPT)"
I have saved the flyer in case anyone wants to see it, and see the lack of union bug.
That's from Lance Haver. And just for the record, I doubt that he supports Mike Nutter for Mayor either.
Not that it's that big a deal but...
Is the flyer a full color glossy brochure or something that could have been made on a color copier or color printer? If the latter, then there's no real issue with the lack of union bug because it was probably printed or copied in house. As much as I would have liked (and still would) for campaign workers to be unionized employees (oh to think of the overtime!), it's still ok for them to print out handouts like that. On the other hand, if they were done by a professional non-union printer... oi.
Dan should apply his own critique to his position
Why don't you tell us how Philadelphia is going to deal with having a $540M deficit over the next five years while "Philadelphia was the most heavily taxed of the nation's largest cities, with the highest rates falling on the people with the lowest incomes."
What's your fail safe for that?
Oh and if you don't think taxes have any relation to to revenues, why don't you ask why the Brandwine Realty Trust, "the nation's fourth-largest real estate investment house" and the builder of a "glittering crystal shard on the Philadelphia skyline," located its headquarters in Radnor instead of Philadelphia???
You and Fattah going to hold a yard sale to pay for all your poverty programs??? Either way, whether we reduce taxes (and revenues don't respond) or keep them at levels that prohibit business growth withint the city limits, all your beloved poverty programs are going to get cut. As noted by today's Daily News, "Specifically at risk, according to city budget officials, are 10 new Beacon school programs, which provide educational and counseling services at community centers; 4,580 after-school slots; 12 curfew centers, including 11 that are slated to open by June; and a major expansion of a violence-reduction program for youth."
The BPT folks at least have a plan to grow revenues and pay for the programs needed to address the poverty problem. Whereas critics like Dan have none and are content to simply stick their heads in the sand and hope Philadelphia's fiscal situation just "magically" fixes itself.
http://http://www.philly.com/mld/philly/16762667.htm
http://www.philly.com/mld/inquirer/16762601.htm
http://www.philly.com/mld/dailynews/16764593.htm
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Phillyville
Well, I do agree that taxes
Well, I do agree that taxes aren't the magic volume switch. Businesses would pay the tax rates if they felt it was worth it as well.
It is really a more detailed problem for Philly. It isn't that taxes are high. It is that there is no perceived benefit to the taxes.