[UC] What do you expect from political hacks who know squat about running a business?
From today's Daily News. If something like this wacko scheme cooked up by Councilmembers Green Quinones-Sanchez passes: * forget about capital improvements, financed in whole or part out of current income or paid-off with the same; * forget about making a profit in a business (like rentals) that's not based on a mark-up between the cost paid for goods and the income received by selling them; * check all of your leases so you'll know when they're up for renewal and can be sure to raise rents and add utility fees to compensate for the fact that you'll be taxed on receipts but won't be able to deduct the costs of running the buildings. This scheme is, to put it as kindly as possible, lunacy. - Alan Krigman KRF Management, ICON/Information Concepts Inc 211 S 45th St, Philadelphia PA 19104-2918 215-349-6500, fax 215-349-6502 krf...@aol.com or al.krig...@krf.icodat.com Council members' plan would change business-tax structure By CATHERINE LUCEY Philadelphia Daily News _luc...@phillynews.com_ (mailto:luc...@phillynews.com) 215-854-4172 WHEN JOE WEISS, chairman of the software-design firm Electronic Ink, heard about business-tax legislation cooked up by two freshman City Council members, he was shocked. When I heard the proposal, I was incredulous, said Weiss, whose Center City firm employs 80 people. And for good reason. Council members Bill Green and Maria Quinones-Sanchez have been working on a plan that would reverse a 14-year effort to reduce a tax on businesses' gross receipts. But after a conversation with Green, Weiss has come around, at least part of the way. I talked to the councilman and I listened to his explanation, and now I have an open mind to listen, said Weiss. He presented some numbers that made it look like his position is a positive one. For Green and Quinones-Sanchez - who are expected today to introduce legislation that would radically change the city's business-tax structure - hearing that someone like Weiss has an open mind is probably a good start. How it works The city's business-privilege tax has two parts - a gross-receipts portion, which taxes firms on their sales, and a net-income portion, which taxes profits. Based on a long-held belief that the gross-receipts portion is unfair because it charges businesses even when they lose money, Council and the mayor have been gradually reducing the gross-receipts tax since 1995. But Green and Quinones-Sanchez argue that the current setup penalizes city-based firms and lets national retailers get away with paying little or nothing. That's because the tax on profits applies only to businesses headquartered in Philadelphia. Big chains, like Home Depot or Wal-Mart, pay nothing because they aren't based here. Green and Quinones-Sanchez are proposing a five-year phase-out of the tax on profits in favor of a higher gross-receipts tax to keep revenues stable. Both argue that such a system would remove the disincentive to locate a business in the city and spread the tax burden over more businesses. We believe we're going to create more jobs and send a message to the world that Philadelphia is open for business, said Green. To protect smaller businesses and startups, the Council members want to exempt the first $100,000 of sales from any taxes. And, to protect grocery stores, they plan to provide an exemption for those selling fresh food. If people are looking to start up businesses, we want to provide people with an incentive, Quinones-Sanchez said. Mayor Nutter, who has long been a champion of reducing the gross-receipts tax, said he still needed to see more research on how the change would affect businesses. Certainly it is a creative idea, but it is a different way of looking at tax policy, Nutter said. We need to know about the impact. What does business think? In the business community, the pitch so far has met with mixed reactions. Danilo Burgos, president of the Dominican Grocers Association, said he thinks the $100,000 exemption would benefit many of his more than 300 members. The small businesses - in our case, mom-and-pop businesses - those types of businesses are the ones that are going to benefit the most, Burgos said. A lot of businesses in the first couple years, it's hard to break that $100,000. And Ned Rauch-Mannino, director of policy and programs at the Urban Industry Initiative, a city-sponsored agency that supports manufacturers, said the proposal could aid manufacturing companies that sell goods outside the city, because outside sales aren't subject to the gross-receipts tax. Going forward, this bill could be a great advantage to any company doing the great majority of their business outside Philadelphia, bringing profits back to
Re: [UC] What do you expect from political hacks who know squat about running a business?
Al, When I first heard a form of this, the first million dollars of revenue was to be exempted. This was supposed to exempt the vast majority of local businesses and allow taxation of big multi-national corporations who pay little or nothing. Multi-nationalscan pay nothing in gross receipts and avoid net profits through accounting tricks. This is the first I've heard about this current plan. Glenn -Original Message- From: krf...@aol.com Sent: Sep 30, 2010 8:59 AM To: UnivCity@list.purple.com Subject: [UC] What do you expect from political hacks who know squat about running a business? From today's Daily News. If something like this wacko scheme cooked up by Councilmembers Green Quinones-Sanchez passes: forget about capital improvements, financed in whole or part out of current income or paid-off with the same; forget about making a profit in a business (like rentals) that's not based on a mark-up between the cost paid for goods and the income received by selling them; check all of your leases so you'll know when they're up for renewal andcan be sure to raise rents and add "utility fees"to compensate for the fact that you'll be taxed on receipts but won't be able to deduct the costs of running the buildings. This scheme is, to put it as kindly as possible, lunacy. -Alan KrigmanKRF Management, ICON/Information Concepts Inc211 S 45th St, Philadelphia PA 19104-2918215-349-6500, fax 215-349-6502krf...@aol.com or al.krig...@krf.icodat.com Council members' plan would change business-tax structure By CATHERINE LUCEYPhiladelphia Daily News luc...@phillynews.com 215-854-4172 WHEN JOE WEISS, chairman of the software-design firm Electronic Ink, heard about business-tax legislation cooked up by two freshman City Council members, he was shocked. "When I heard the proposal, I was incredulous," said Weiss, whose Center City firm employs 80 people. And for good reason. Council members Bill Green and Maria Quinones-Sanchez have been working on a plan that would reverse a 14-year effort to reduce a tax on businesses' gross receipts. But after a conversation with Green, Weiss has come around, at least part of the way. "I talked to the councilman and I listened to his explanation, and now I have an open mind to listen," said Weiss. "He presented some numbers that made it look like his position is a positive one." For Green and Quinones-Sanchez - who are expected today to introduce legislation that would radically change the city's business-tax structure - hearing that someone like Weiss has an open mind is probably a good start. How it works The city's business-privilege tax has two parts - a gross-receipts portion, which taxes firms on their sales, and a net-income portion, which taxes profits. Based on a long-held belief that the gross-receipts portion is unfair because it charges businesses even when they lose money, Council and the mayor have been gradually reducing the gross-receipts tax since 1995. But Green and Quinones-Sanchez argue that the current setup penalizes city-based firms and lets national retailers get away with paying little or nothing. That's because the tax on profits applies only to businesses headquartered in Philadelphia. Big chains, like Home Depot or Wal-Mart, pay nothing because they aren't based here. Green and Quinones-Sanchez are proposing a five-year phase-out of the tax on profits in favor of a higher gross-receipts tax to keep revenues stable. Both argue that such a system would remove the disincentive to locate a business in the city and spread the tax burden over more businesses. "We believe we're going to create more jobs and send a message to the world that Philadelphia is open for business," said Green. To protect smaller businesses and startups, the Council members want to exempt the first $100,000 of sales from any taxes. And, to protect grocery stores, they plan to provide an exemption for those selling fresh food. "If people are looking to start up businesses, we want to provide people with an incentive," Quinones-Sanchez said. Mayor Nutter, who has long been a champion of reducing the gross-receipts tax, said he still needed to see more research on how the change would affect businesses. "Certainly it is a creative idea, but it is a different way of looking at tax policy," Nutter said. "We need to know about the impact." What does business think? In the business community, the pitch so far has met with mixed reactions. Danilo Burgos, president of the Dominican Grocers Association, said he thinks the $100,000 exemption would benefit many of his more than 300 members. "The small businesses - in our case, mom-and-pop businesses - those types of businesses are the ones that are going to benefit the most," Burgos said. "A lot of businesses in the first couple years, it's hard to bre
