Wednesday, January 24, 2007

Happy Anniversary City Wage Tax

An anniversary worth noting. Tomorrow, January 25th, marks the anniversary of Pittsburgh City Council passing the city's first wage tax on residents in 1954. The wage tax had been pushed by the powers that be for years as a mechanism to keep the tax burden on local industry from increasing.1 That may have worked I suppose, but the consequences on residents are being felt more every year. Given how small the city of Pittsburgh is, even for those who prefer city living it is very easy to still live outside the city proper and escape some or all of the 3% combined city and school district income tax you get hit with just for living in City. I am sure there are people actually living in the city who maintain some other address outside of the city limits just to escape the tax.

The only study I know of that looked specifically why people moved out of the city and into the suburbs is this report: The Impact of the Earned Income Tax on Locational Decisions and the City of Pittsburgh. put out by the City of Pittsburgh Department of City Planning. April 1987. Actually I have it scanned in pieces, here is part 2, and part 3. It's twenty years old now, but I can't imagine the basic results being much different these days. Basically it documents the obvious and says it is indeed taxes that is the number one reason people move out of the city yet stay in the region.

1
see Research: An Instrument of Political Power. by Edward F. Cooke. Political Science Quarterly, Vol. 76, No. 1. (Mar., 1961), pp. 69-87.

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