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Oppose Tax Hikes to Close Budget Gap in Philadelphia!
An Open Letter to the Philadelphia City Council

May 20, 2010

Dear Council Member:

     On behalf of the National Taxpayers Union's members in the City of Philadelphia, I urge you to reject any tax hikes to close a $150 million budget deficit. The City Council should avoid the tired prescription of new and higher taxes. Instead, the Council must recognize that years of increasing spending cannot be maintained, and that targeted budget cuts are necessary to restore the city's government to its proper, sustainable size.

     A tax hike on soda would further burden Philadelphia's poorest residents as they weather this recession. Since poor families tend to consume more soda, a tax increase aimed at this product will hit the poor hardest. A tax as little as 1/2 or 3/4 cents per ounce would increase the cost of a 64-ounce bottle of Coke or Pepsi about 32 to 48 cents, a substantial sum for a family living on a budget. In the midst of this recession, poor families in neighborhoods like West Philadelphia can ill afford higher costs for their groceries.

     And while some see tobacco as an easy target for taxation, the reality is that tobacco tax hikes are likewise very burdensome to the poor, who are most likely to smoke, and they rarely produce the promised revenue. Further, any property tax hike would increase the cost of living for all homeowners. Since Philadelphians already live in the most heavily taxed city in the country, raising the property tax will be painful and likely drive residents from the city to the less costly surrounding areas.

     It should be noted that the proposed tax hikes will inflict themselves on convenience stores, restaurants, and other small businesses as well, as beverages and tobacco products comprise a substantial portion of their sales. Forcing their prices up in comparison to products offered in neighboring states and counties will likely lead to more cross-border shopping, harming businesses and providing unreliable revenue estimates. With fewer sales, the prospect of crippling job losses increases.

     Just as hard-working families have tightened their belts, the City Council should confront the tough decisions on spending. The time has come to stop piling more taxes on residents, making job losses worse, and attempting to delay the inevitable necessary reforms to an unsustainable government. Therefore, I urge you to reject any tax hikes as part of the budget.


John Stephenson
State Government Affairs Manager