Ninety-eight percent of Philadelphia businesses are small businesses with fewer than 50 employees. Many fill gaps in services that larger businesses do not provide, while others implement business strategies that address individualized community needs, such as allowing payment arrangements for needy patrons and providing skill development to local youth through job experience. Small businesses create over half of the jobs in the city (54%), many of which offer wages higher than the minimum wage. Eighty-five percent of small business owners pay all of their employees more than the minimum wage. Yet, despite all this, their interests in economic development issues are not effectively represented. Accountability and transparency are at issue here; policies are needed to move all businesses to invest in our communities the way small businesses do.
A bill introduced by Councilwoman Helen Gym offers promise that change is on the horizon. It would require businesses that benefit from special tax incentives (valued at more than $50,000 per year) at the local or state level to publicly report the total value of subsidies they receive each year. The “Subsidy Accountability Bill” would also require reporting on the number and quality of jobs created by businesses that receive subsidies. Subsidized businesses would be required to report the number of people they employ at the beginning and end of the year in which they received the subsidy, as well as the next five years after receiving the subsidy. This bill goes up for vote in Council this fall.
SAleem Chapman
Policy & Advocacy Manager
The Good Economist 3
In Philadelphia Business Taxes: Incentives and exemption, The Pew Charitable Trust sought to quantitfy the expenditures associated with the city's 21 tax incentives and exemptions for businesses.
Read the complete report here.