What could put Philadelphia on a new path of growth? For the region, the Economy League’s World Class agenda has identified key priority strategies to boost growth over the long haul — supporting entrepreneurship, stoking our innovation economy, and selling our goods and services to the world. For Philadelphia, these strategies are also critical. But the city has one policy option supported by stacks and stacks of research that could put its economy on a different trajectory — lowering the wage tax.
Since its inception as a temporary tax in 1939 to tide the city over the Great Depression, the wage tax has been identified in scores of commissions and studies as the root of the city’s wealth-building challenge. By taxing people’s wages at such a high rate, Philadelphia drove away jobs and income. It’s a major reason, as Center City District data shows, that 40 percent of Philadelphia residents outside of Center City leave the city every day to go to work. The wage tax has been a significant barrier to more job creation in Philadelphia.