The ultra-rich profit from the pandemic while our communities continue to suffer from disinvestment. We must recognize that normal was never good enough and explore progressive revenue solutions that provide a more equitable path forward than the one we are on.
Pandemic Profiteers
In our city and around the country, bankers, landlords, politicians and other key figures hold the most power in defining what “growth” means. Historically, a rising annual gross domestic product (GDP), or the value of all finished goods and services made in a country over a year, has been a key marker of positive economic growth. What this doesn’t take into account is the inequalities in growth. Only focusing on GDP and economic gain concentrated at the top centers the ultra rich and ignores the needs of the people who make our economy run.
Collectively, seven of the top Philly-Area Wealth Hoarders increased their net worth by $8.1B, or 29%, during the last 2 years of the pandemic. Michael Rubin, a very vocal opponent of wealth tax proposals, saw the largest increase in his net worth with a 176% jump from $2.9B to $8B. Jeffrey Yass made national headlines this month as the sixth-highest income earner in the U.S. According to ProPublica, Yass managed to pay only 18.7% in average annual federal income tax on his income of $1.3B, which was lower than the average tax rate for Americans making $200K-500K. While these ultra-rich players profited from the pandemic and evaded taxes, working Philadelphians saw meager wage increases of only 4.1% and skyrocketing expenses due to inflation.
A locked entrance to SEPTA’s City Hall Concourse.
Consequences of Growth Inequity
- Record high rates of gun violence that continue to tear apart families and communities, despite our city’s inflated police budget.
- Crumbling schools that poison their students and staff on a daily basis.
- Public transit that continues to stagnate and trap riders while other cities like Boston, Chicago, Los Angeles, and Seattle undertake ambitious expansion projects.
- A shrinking supply of subsidized housing at a moment of record housing insecurity with market rate rent prices shooting up 13% since the start of the pandemic.
- Libraries and recreation centers that are unable to stay open even 5 days a week in a moment where, more than ever, children need safe spaces in their neighborhoods.
- Critical water infrastructure is failing, causing street collapses around the city that are left unrepaired for nearly a year.
As long as billionaires and the politicians they fund are able to maintain their power, the wealthy and their corporations will continue to underfund these desperately-needed services in favor of their own bottom lines that line their pockets so abundantly.
University City Townhomes, an affordable apartment complex in danger of being sold and redeveloped as gentrification drives displacement of and inflates housing prices.
An Equitable Path Forward
The vastly unequal nature of pandemic ‘recovery’ and ‘growth’ and its violent effects on our communities has made one thing clear: we cannot withstand another year of underinvesting in public services while allowing the wealthy to avoid paying what they owe. We’re aware of numerous different services like those listed above that should be generously funded, yet are neglected because of tax and budget policies that favor the rich. So how do we get our fair share??
- Wealth Tax: We need bold tax policy that transfers resources from wealth extractors to the public good, ensuring that those who benefit the most from being in Philadelphia pay their fair share to support the well-being of Philadelphians. The wealth tax bill that was recently introduced in City Council would be a significant step in the right direction. Hundreds of millions of dollars could be used to make our streets and schools safer, our libraries fully operational, and our public health infrastructure stronger — all from a mere 0.4% tax on stocks and bonds.
- Care, Not Cops: City budget policy also needs to change drastically to achieve equitable growth. The latest from Philly’s Democratic establishment involves a significant boost to police funding, purportedly for violence prevention. This change would be hugely problematic, not only because police are minimally effective in preventing homicides, but also because there are more effective and less militarized ways to reduce gun violence. Moral budget policies could redivert police funding to public services like:
- Community-based outreach programs (that are more effective than police in violence prevention);
- Parks and recreational activities, along with clean-up and greening of vacant lots, to support mental health;
- Overall efforts to reduce poverty through direct basic interventions, like the guaranteed income program that Philly is piloting this year.
- Tax Relief for Tenants and Longtime Homeowners, Not Big Business: The increase in revenue generated by this year’s property value reassessments offers an opportunity to make our local tax system more progressive. The City must prioritize tax relief efforts for long-time homeowners and renters, rather than cutting taxes for wealthy corporations like Comcast and Aramark. We are glad that Mayor Kenney’s tax relief proposal includes some of the things listed below, but we challenge him to go further. We are also concerned that some City Councilmembers are calling for cuts to the Business Income and Receipts Tax (BIRT) and property tax rates, rather than focusing on targeted tax relief for low-income and working class Philadelphians. The City should:
- Increase the Homestead Exemption for primary residences;
- Increase funding for the Longtime Owner Occupants Program (LOOP) and other tax relief programs targeting low-income, longtime homeowners;
- Increase funding for rental assistance programs for tenants, since many landlords will pass increases in property taxes through to their tenants and federal COVID emergency rental assistance funds are running out;
- Fully fund the Right To Counsel program that offers legal representation to tenants facing eviction so that it can expand beyond 2 zipcodes
- No cuts to Business Income and Receipts Tax (BIRT).
We will not stand back as wealthy elites bleed our city dry. The big lie of trickle-down economics has padded the coffers of the ultra-rich, while the rest of us contend with the reality of living in “the most impoverished large U.S. city.” This pandemic should be a wake up call for us to reimagine who we tax and how we tax. Progressive revenue provides sustained funding for the city, funding that allows all Philadelphia residents and communities to thrive. Our fair share is long-overdue, and it’s time for the ultra-rich to pay up!
Check out our last blog post where we demand that City Council adopt a bold vision for Philadelphia that rejects the pre-pandemic “normal” of corporate tax evasion and wage theft and builds an equitable, empowered future for all people of this city.
