By Mustafa Rashed | The Philadelphia Business Journal
Jun 25, 2023
The decision to cut wage and business taxes in Philadelphia represents a significant step forward for the city, particularly for minority and diverse businesses, writes guest columnist Mustafa Rashed.
As a minority business owner in the vibrant city of Philadelphia, I understand the challenges and barriers that we face in the pursuit of success and growth. Recent developments have ignited a spark of hope within me and many others like me. The new cuts to both wage and Business Income and Receipts Tax (BIRT) deliver long-awaited benefits to our community and Philadelphia’s economic growth. For clarification: the BIRT tax applies to any person or entity doing for-profit business in the city. The current portion of net income tax after deductions is 5.99%; with a decrease of just 0.03%, businesses with a net income of $1 million are saving $1,800 annually.
By lifting even slightly the financial burden on businesses, the city is signaling its support for entrepreneurship, innovation, and job creation. This move not only stimulates local business activity but also attracts external investments and talent. Consequently, minority and diverse businesses gain the opportunity to flourish, making valuable contributions to Philadelphia's overall economic prosperity.
High taxes have long been a deterrent for businesses, making it difficult for them to compete with counterparts in neighboring cities. Lower taxes are a powerful incentive for businesses to reinvest their savings into expansion and job creation. As a result, Philadelphia's minority and diverse communities stand to benefit from increased employment opportunities. By reducing financial barriers, the tax cuts encourage businesses to expand their workforce, providing meaningful employment to individuals from marginalized backgrounds. This inclusive approach to job creation fosters economic equity and social progress within the city.
Reduced tax burdens do more than just bring new jobs and higher wages: Businesses can also begin to allocate more resources toward community engagement and development initiatives. As a minority business owner and a lifelong Philadelphian, I cherish my deep connection to the community, recognizing the significance of reinvesting in local organizations and causes. These tax cuts present an invaluable opportunity for businesses like mine to contribute to the holistic development of Philadelphia actively. By addressing social and economic disparities, we foster a sense of belonging and empowerment, particularly among traditionally marginalized communities.
The decision to cut wage and business taxes in Philadelphia represents a significant step forward for the city, particularly for minority and diverse businesses. These tax cuts not only stimulate economic growth but also foster an environment of inclusivity, entrepreneurship, and innovation. By empowering minority business owners, Philadelphia can harness the full potential of its diverse communities, leading to a stronger, more prosperous city for all.
Mustafa Rashed is CEO of Bellevue Strategies, a government relations and communications firm in Philadelphia.