Often when people hear about cutting taxes for businesses they think that it is about tax breaks for large corporations making billions of dollars each year. When in fact, it is about supporting small businesses like mine and others such as pizza shops, hair salons, and coffee shops. We’re not making billions of dollars yet we are creating local jobs and providing needed services within our region and beyond.
People who are not business owners may see headlines and think that businesses simply want lower taxes. What is often unseen by the public but felt by small business owners is that our businesses are taxed twice through the BIRT tax. Philadelphia is the only major city in the nation that has this double taxation structure in place.
When small businesses are unfairly taxed twice it limits our ability to hire more staff and provide more necessary services. Reducing business taxes isn’t about putting more money into the pockets of ‘big business’ but about taxing all businesses equitably and in line with business practices throughout the country.
We mustn’t overlook the fact that many small business owners are also Philadelphia residents. In addition to the unfair business tax, we are also grappling with our own personal 30%+ property tax increase that adds another financial burden. As a Philadelphia resident and small business owner, I want to live in a city that truly loves and supports both its residents and businesses.
Everyone wants to live and work in a city that is safe and clean everywhere, not just in some zip codes. Residents and businesses want to pay their fair share of taxes, no more or less, and receive quality city services as a result. Now is the time for local government to create policies and tax structures that benefit businesses and residents alike. The $1.4 billion in federal relief from the American Rescue Plan is an opportunity to consider how to best support businesses and residents alike and give Philly workers a raise.
It’s time to give Philly’s workers, and working business owners, a raise.
With inflation surging, staples of everyday life — gas, groceries, and going out — are getting more expensive. Everyone could use some more money in their pockets to help meet rising costs.
There are hard-working everyday Philadelphians who wake up early and go to sleep late running, or working at jobs that are the life blood of our city’s economy.
That’s why cutting taxes on workers and business owners is so important: it would give an immediate raise to workers and increase the ability of employers to raise wages now and in the future.
The rationale for cutting taxes for workers is easy to understand. Everyone who works pays taxes, and cutting Philadelphia’s too high wage tax would give an immediate tax cut to every worker who lives or works in the city. It puts more money in people’s pockets right away so they can afford the things they need — some of which are local goods and services.
But cutting Philadelphia’s business taxes is every bit as important to increasing workers’ wages as a cut in the wage tax is. People who are not business owners might just see headlines and think business just want lower taxes, but they don’t understand that Philadelphia’s taxes are different than other cities. Philadelphia effectively taxes people who are self-employed twice — once with business taxes and then the wage tax. That double taxation really limits the ability of firms like mine to grow and increase the pay for our employees.
As a small business owner in the city, with more than two dozen employees and multiple offices, I can tell you first-hand how high business taxes limits people like me who are self-employed and restricts my ability to hire more employees. There is no way to reduce our city’s poverty without increasing the number of people working at good wages.
It seems that policy makers too often forget that business owners are working people also. It’s easy to look at a business as an unbodied “entity” and not something that an individual started, poured their heart and sweat into, and earns their income from. Not all businesses are big, publicly traded firms. Most are small, and many are solo entrepreneurs providing services to other firms and the public. Paying taxes twice reduces their income even as prices rise.
Every business owner I know works hard with a goal of growing. When they grow, naturally they need help, so they hire, creating income for others. No one hires — just to hire. They hire because they need help. The more they grow, the more help they need. So, it makes sense to invest in this kind of growth that benefits both businesses and workers.
Especially now, with forces outside our control — rising prices brought on by inflation Philadelphia workers and working business owners could really use the City’s help. The City can and should give every worker an immediate raise by cutting wage and business taxes.
Tonya Ladipo is the founder and CEO of The Ladipo Group, LLC.