Philadelphia is having a tough time these days, much like many other cities. Expenditures are up and revenues are down. What’s a city to do?
One thing that the city is doing is pursuing collections matters very aggressively. I’ve probably gotten more city tax related phone calls at my office in the last month than in the entirety of my career. And I don’t mean that in a good way. They are mostly low-dollar matters, with penalty and interest generally exceeding the amount of tax due.
You’d think they’d do better to try and collect from the bigger fish. According to the City’s own web site, “business tax delinquents owe the City more than $53.3 million in outstanding judgments.” The top ten on the list each owe more than $1 million. You can see the list here (downloads as a pdf).
To deal with the number of tax delinquents, the city is considering an amnesty program, the first for the city in 20 years. The program was unanimously recommended by the City Council’s Finance Committee last week.
The amnesty program would forgive all penalties and half of the interest on unpaid tax bills. I haven’t seen the details yet but generally, amnesty programs only apply to matters which have not already been subject to judgment (meaning the business tax delinquents on that list would not get a pass). The current administration believes that it will net between $25 million and $30 million with the program.
Community Legal Services would like to see the final amnesty bill include unpaid water bills. That provision has not yet been included; one would hope that if such a provision were included, it would be limited to low-income residents. There’s no point in giving many of the existing slumlords in Philadelphia a free pass; it’s bad enough that many don’t pay their taxes.
I am generally a fan of amnesty programs because the statistics show that they tend to work. Whether you believe that folks act in good faith with respect to these programs is a different matter altogether – but they do tend to pay up, something that wasn’t happening before. For many, it’s a fresh start.
But amnesty without reform, especially in a city like Philadelphia, can be meaningless. Hopefully, we’ll see a step forward there, too.
{ 1 trackback }
{ 2 comments… read them below or add one }
Best thing for your City to do, is the same thing that would be the best thing for the State of NJ to do, which is the same thing that would be the best thing for the State of California to do, which is very simple but completely impossible for them to do.
Get rid of the democrat/socialists running it!
Benjamin Franklin warned us: “He that is of the opinion money will do everything may well be suspected of doing everything for money. ”
“He that’s secure is not safe. ”
“Many a man thinks he is buying pleasure, when he is really selling himself to it. ” (was he thinking of Tiger Woods?)
“Anyone who trades liberty for security deserves neither liberty nor security.”
“The U. S. Constitution doesn’t guarantee happiness, only the pursuit of it. You have to catch up with it yourself. ”
Jeff Day EA
Evansville, In
Do amnesty programs truly work? I’d be interested in hearing why you think they do. The common perception regarding amnesty programs is that they actually reduce future compliance rates, as taxpayers will forgo filing anticipating another amnesty program down the road. I’m not sure if there are any statistics to back this up, but my personal opinion is that while there would be immediate increased revenues for the entity offering the amnesty (in whatever time period the amnesty is), but as a long term approach to improving complaince it would not be successful. That would be achieved only by drastic simplification of the code.