Will an 8% Sales Tax Hike Anger the shopping god?

Some of the best minds on local tax policy will gather next week to ponder whether Philadelphia can raise its sales tax rate without also triggering a steep decline in business activity. The timing of this discussion is - right on - because even though the Mayor and City Council have agreed on a budget plan, it’s passage is conditional on State approval of some key items.

If  Harrisburg says no, then brace for deep cuts that will definitely include layoffs and/or calls for higher taxes in other areas.

If you’re a fan of Sim City scenarios, this folks is the real deal. If we get it wrong, then the Philly Sims will all leave and then things spiral downwards. But, if we get it right, raise the sales tax just enough to cover the bills till the rebound, then we can all let out a big cheer when the “temporary” tax is retired.

So, here are the details. The forum is titled Our Taxes, Our Future. It will be held next Wednesday, May 20 from 6:30 p.m. - 8:30 p.m. at the Independence Mall Visitor’s Center. It will be in the Independence Ballroom.

Moderator:

Ben Waxman, It’s Our Money blogger

Confirmed panelists:

Steve Agostini, Budget director for the City of Philadelphia

Bill Green, City Councilman

Robert Inman, Professor fo Finance and Economics, University of Pennsylvania

Derek Green, Special Counsel to City Councilwoman Marian Tasco.

Certainly, one part of the discussion will be the city’s proposed five-year sales tax hike for Philadelphia. Philadelphia and Pittsburgh already have the state’s highest sales tax rates at seven- percent. If state lawmakers approve the change, Philadelphia would have an eight-percent while its surrounding suburbs likely will remain at six-percent.

But if the state doesn’t approve Philly’s sales tax request and some other pension fund related changes, then we could be looking other tax increases and/or more layoffs for city workers. So, there’s plenty to talk about and these panelists are exactly the people I would want to hear discuss it.

**Hosted by Young Involved Philadelphia, The Center for Progressive Leadership, The Committee of Seventy, The Institute for the Study of Civic Values, and UrbanPhilly.com Professional Network (UPPN)