Councilmember Allan Domb’s bill passed unanimously, says next step is for city to enact aggressive outreach campaign to the 150,000 Philadelphians that could benefit
PHILADELPHIA – In an effort to curb Philadelphia’s highest poverty rate in the nation, Philadelphia City Council unanimously passed Councilmember Allan Domb’s Wage Tax Relief bill that would allow 60,000 households to apply for a refund that would give them back the wages they paid in city taxes.
The new regulation would allow qualifying low-income individuals and families to be reimbursed the city’s portion of the Wage Tax. This would allow a family of four earning an income of $34,250 to receive about $810 annually. A single adult earning about the same income with three children would receive about $880 annually. Both of these amounts would increase significantly if the PICA portion of the Wage Tax expired in 2024.
“This bill will impact the lives of at least 150,000 Philadelphians who have been stuck in poverty,” said Councilmember Domb. “We can no longer tolerate being the largest city in America with the highest poverty rate. More importantly, we should not be the largest city taxing our poor – higher than every other city in the country.”
Philadelphia implemented the first wage tax in the country in 1939. The current rate of 3.87 is the second-highest among the top 25 largest cities, only slightly behind New York City. The refund would provide immediate assistance for those who qualify, allowing them to pay bills, buy groceries, start a savings plan and help with the day-to-day financial burden many face across the city.
“Our city has been taxing the wages of its poor for far too long,” said Councilmember Domb. “We should not be filling the city’s coffers on the backs of people earning poverty wages. We should be putting their hard earned money back into their pockets to help them thrive.”
The bill was co-sponsored by Councilmembers Jannie Blackwell and Maria Quiñones Sánchez. Additionally, several individuals and organizations publicly supported the bill, including Community Legal Services, Campaign for Working Families, Benefits Data Trust, the Reinvestment Fund and Ceiba.
“This bill is an opportunity for the City of Philadelphia to invest in working families,” said Councilmember Sanchez. “As Chair of Council’s Special Committee on Poverty Prevention & Reduction, I appreciate Councilman Domb’s work on this issue, and look forward to working to ensure effective implementation and access to this program.”
“Thousands of individuals and families will be able to benefit from having some of their tax dollars return to them,” said Councilmember Blackwell. “Whether it’s a few hundred or more than a thousand dollars, this is much needed relief that will go a long way to improving their financial stability.”
According to Councilmember Domb, the next step is to work with the city to develop an aggressive educational outreach campaign to notify all households available for the refund. Currently, qualifying residents can be reimbursed a half a percent in Wage Tax revenue. With the expanded rate, tens of thousands more will be more inclined to apply.
“We will be exploring all opportunities to educate individuals and families about this much needed refund,” said Councilmember Domb. “Educational outreach is essential and we will encourage the Administration to take an aggressive approach to ensure that those in our poorest neighborhoods know there is relief available to them.”
The Wage Tax refund will be effective as soon as it is signed by the Mayor.
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