Councilmembers Kendra Brooks and Nicolas O’Rourke Announced the People’s Tax Plan, Which Expands Tax Refund and Tax Relief Programs
PHILADELPHIA – Today, Minority Leader Kendra Brooks and Minority Whip Nicolas O’Rourke announced the “People’s Tax Plan,” a legislative package to provide tax relief for low-income Philadelphians and small businesses. The People’s Tax Plan expands two popular initiatives, the Wage Tax Refund and the BIRT tax exemption, and includes a revised version of the wealth tax introduced by Councilmember Brooks in 2022.
“As the leader of the minority wing in City Council and a member of the Working Families Party, I see it as my responsibility to offer a vision that puts people before profits, local businesses before multinational corporations, and ensures billionaires and corporations pay their fair share in taxes,” said Councilmember Kendra Brooks (At-Large). “At a time of heightened uncertainty about inflation and federal funding, the People’s Tax Plan puts working families and small businesses first.”
“The Wage Tax Refund passed City Council with unanimous support, including the support of many of our colleagues,” added Councilmember O’Rourke (At-Large). “We want to update the law so that all poor and working-class Philadelphians can get this refund.”
Drawing on recommendations from both the Tax Reform Commission and the Tax Reform Advisory Committee, the People’s Tax Plan calls for:
- Wage Tax Refund Expansion: The plan broadens eligibility to align with PACENET income standards for individuals (≤$33,000/yr) and joint filers (≤$41,000/yr) and expands the refund to include the portion of the wage tax paid to the Pennsylvania Intergovernmental Cooperation Authority (PICA). The average refund for current recipients is $170. With this update, the average refund will be over $275.
- Small Business Tax Relief: Instead of eliminating the BIRT exemption and requiring an estimated 80,000 small businesses to pay the BIRT tax, the Minority Wing proposes raising the BIRT exemption to $200k. This will provide tax relief for small businesses that contribute to less than 3% of BIRT revenues. The Minority Wing believes that the City can and should defend the exemption in court, as the exemption’s original champion recommends.
- Reintroducing the Wealth Tax: The plan introduces a revised version of Minority Leader Brooks’s Wealth Tax of 2022, which proposes a 0.4% tax on stocks and bonds. This new version excludes the first $100k of taxable assets, as well as owner-operated small businesses, education savings accounts, retirement savings accounts, and mutual funds. The tax is predicted to raise $200 million in revenue annually.
“Philadelphia cannot afford to keep taxing poverty while calling it progress,” said Dr. Nikia Owens, President and CEO of the Campaign for Working Families. “Reducing Philadelphia’s City Wage Tax for low-income residents is more than a tax policy – it is an act of righting financial inequality. With households earning under $30,000 spending 52% of their income on rent, facing a 25% rise in grocery prices, and a 40% spike in home costs, the gap between a paycheck and peace of mind keeps growing.”
“Our tax system should not drive the working poor into even deeper poverty,” said Jonathan Stein, an attorney and Council-appointed member of the 2002 Tax Reform Commission. “Instead of cutting taxes for corporations, we should reform our tax system by ensuring all eligible working poor receive the wage tax refund and by fighting in court for the very popular BIRT tax exemption for small businesses.”
“Small businesses are the backbone of Philly—we keep the neighborhoods alive, create jobs, and put money back into the community,” said Nija Wiggins, a small business owner who has benefited from the BIRT exemption in the past. “Taking away the BIRT tax waiver would hit us where it hurts, making it even harder to grow, hire, and keep our doors open. Philadelphia is ‘the city that loves you back,’ so why make it harder for small businesses that love this city and keep it running?”
“It has been only two short months since multi-billionaires took our entire city on a 2.5 year ride,” said Debbie Wei, a founding member of Asian Americans United and a leading voice of opposition against 76DevCorp’s proposed arena near Chinatown. “Now our small businesses are faced with a proposed tax increase in their own city while billionaire developers seek tax breaks and have the power and money to pay to play.”
The legislation included in the People’s Tax Plan is set to be introduced in City Council on Thursday, March 27.
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