December 12, 2019

Tax the Rich: Clarke's Abatement Trim is Not Enough

Tax the Rich: Clarke's Abatement Trim is Not Enough

Today, City Council is almost certain to vote to trim down Philadelphia’s 10-year property tax abatement, a notorious incentive which has lined the pockets of the rich. The reform is very limited, phasing taxes back in by 10% per year for new residential construction. New commercial and industrial properties are still tax-free for 10 years. The bill is a cynical attempt by Council President Darrell Clarke, and the Democratic Party establishment, to co-opt progressive demands and destroy genuine momentum for ending the abatement once and for all.

In reality, the demand to end the abatement came to City Hall on the back of a movement. It was boosted during this year’s local elections and has loomed large since the Our City Our Schools coalition blasted the abated taxes as sorely needed funds for the School District. It acts as jet fuel for gentrification, and working class communities are fighting back.

Clarke is determined to push ahead with his reform before the City Council shifts left in 2020: “progress” made now will reduce the likelihood of a future attempt at full repeal. By pulling onboard nearly the entire Council as cosponsors, this tepid bill lets Clarke walk into the new year with the appearance of a leader who won’t let the Left take over his chamber. And when last week Mayor Kenney demanded that the bill contain a delayed start, Clarke put up no resistance. There is no real feud here: Kenney and Clarke are two sides of the same coin, working together to satisfy real estate developers above all.

Real estate developers recognized the inevitability of reform, and were happy to start haggling at such a low bar. They argue that more serious reform would slow property development, which attracts wealthier people to the city with their wallets and taxpaying potential in tow. They frame the rampant displacement of working class Philadelphians as just an unfortunate byproduct of the economic processes needed to keep the city alive.

Under capitalism, working people are perpetually held hostage to capitalists’ existential drive to rake in profits. When City Hall bureaucrats broker compromises between us and the rich, the demands of the rich win, and the balance of power doesn’t budge. The hard work and organizing efforts of activists, parents, and educators are the reason tax abatement reform is even on the agenda. Clarke’s move is a clear attempt to put the brakes on this momentum.

We should do everything possible to burn through his brakes. Incoming Councilwoman Kendra Brooks ran on a strong platform of rent control and ending the abatements; she could provide a lead in 2020 by organizing mass meetings across the city to build public opposition to the tax abatement. Our movement should not only seek full repeal for big residential developers, but focus on ending abatements for commercial properties, and go beyond: we must fight to tax the rich outside the framework of the abatement. Tax abatement reform bills can only affect abatements on future construction. It will take $4.5B to bring our school buildings up to code, and we need much more than Clarke’s revenue. We must fight to bring in new taxes on giants like Comcast and Aramark, as well as luxury developers, to counteract the unnecessary tax breaks the city has already handed to them.