The BPT: the bane of Philadephia

When I worked for SEIU I was limited in what i could blog. So I wrote this under an assumed name for Young Philly Politics. Before citing it, please read the note at the end.

You would think that, with the Nutter administration securing a substantial victory on tax policy, talk of the “job-killing business tax” would be on the decline.

But that awful tax is not yet dead—only the Gross Receipts portion of the tax is slated for elimination and the reduction in the Net Profits portion of the tax will come more slowly than desired by both Brett Mandel of Philadelphia Forward and the Philadelphia Inquirer. So the Inquirer and Mandel have been working together on a project to keep the terrible consequences of the BPT in the minds of the citizens of Philadelphia.

The first article to be influenced by this collaboration appeared today in a discussion of the factors that might help or hinder the creation of the fourth tallest building in the United States. (Inquirer June 29, p D1.The article is not yet on-line.) Reporter Linda Loyd points out that one reason the project might not be realized is the BPT. She quotes the potential developer Garrett Miller who says that “The business privilege tax is a very confusing tax; It’s onerous.”

Now one would think that this argument would be taken skeptically by a reporter in a city that has seen continuous large scale development over the last ten years in its central business district despite the tax. But, in line with the Inquirer’s policy of blaming the BPT for every ill in the city, Loyd never questions the point.

This is only the first of a series of articles that will point to the hidden costs of the BPT.

Another will point to conclusive evidence that the BPT is a major cause of the high drop-out rate in Philadelphia schools. Shelley Yanoff, of PCCY, is quoted in the article saying that “We have long known that student achievement begins to sink in the middle school years. Now we know the reason: it is only in the middle of seventh grade that students come to learn about the BPT. And, once they hear about it, they know that their economic future will be severely limited by that education-killing tax. They lose all incentive to study, their grades plummet, and they wind up on the path towards dropping out.”

And, when they leave school, where do they go? Many of our young people wind up selling drugs or engaging in other illegal activity. Why? Because of the BPT. In another article in the series, Commissioner of Police Charles Ramsey will explain how our tax structure “drives entrepreneurial young men and women into illicit activities.” “So many young people have a drive to succeed,” he explained, “but with the onerous legitimate-business-killing BPT in Philadelphia, it makes no sense for them to try to start a legal business. So selling drugs, prostitution, and other illegal activities that escape from the BPT become the main outlet for all this entrepreneurial energy.”

Another path too many entrepreneurial minded people take is into one that corrupts government. “Look at all the non-profits that surround our politicians, that pay their supporters outrageous salaries for little work and that exist only because of government grants and subsidies,” points out Irv Ackelsburg, who ran unsuccessfully for City Council against Donna Reed Miller last spring. “If not for the honest-government–killing-BPT people would be engaged in productive activities instead of creating make-work positions at non-profits that only pretend to help people,” Ackelsburg concludes in the article

Ending the BPT would also improve health care. While Marc Stier of SEIU has been writing a series of op-eds against the Republican plan to enlist volunteer doctors to provide health care for the uninsured, he admits in an upcoming article that, “if not for the health-care-killing BPT, the plan would actually work in Philadelphia. If medical practices did not have to pay this burdensome tax, they would be doubling or tripling the hours they volunteer to provide health care for the uninsured. Brady Russell of PUP adds, “I’ve been told off the record that Temple University Hospital is prepared to voluntarily give a free heart transplant every week to a needy Philadelphian if the BPT were eliminated.” Reminded that Temple is a non-profit that does not actually pay the BPT, Russell points out that in this case, as in many others, the effect of the health-care killing BPT may be indirect but is critical nonetheless. “All the suppliers of Temple, including those that make the equipment used in the surgical suites do pay the tax. With all the new business created by the elimination of the BPT, they would be in a position to make advanced medical procedures available to the uninsured for free.”

The Parks would also benefit if the tree-killing BPT were eliminated. “We talk all the time of how taxes effect the business climate,” says Philadelphia Parks Alliance president Pete Hoskins. “And we know that climate has a tremendous effect on plant growth. But it is only in recent years that we have begun to understand the linkage between high business taxes and the growth of trees and shrubs. Eliminating the BPT would create a climate in which everything in our park–except weeds–would double their annual growth rates.”

It is, so far, too soon to tell how this new anti-tax effort will change the direction of the Nutter administration. But, already, Nutter advisor Terry Gillen is talking about scrapping much of the second year agenda of the Nutter administration and, instead, focusing all attention on another assault on the BPT. “We are only just beginning to understand the many ways in which the BPT is responsible for most of the ills of this city” she has confided to an acquaintance. “Pretty much everything we hope to accomplish—improve the schools, reduce violence, end government corruption, improve health care, and tend to our parks—can be better accomplished indirectly by eliminating the BPT than directly by government action.”

Important note: in case it is not obvious, this is satire. All of the quotes, including my own, are made up.