![]() Though it has set off rancorous debate in such communities as Hatfield Township, where it was about as welcome as a rush-hour road project when adopted two years ago, the wage tax has more commonly been a stealth tax, unnoticed by residents already paying it in a town where they work. The tax has become as much a part of the suburban landscape as cul-de-sacs, corporate campuses, and sport-utility vehicles, spreading so quietly and incrementally that, officials say, most people are unaware just how pervasively it is now levied. "The focus is so much on the city wage tax that people forget that these taxes are in the suburbs, too," said Steven Wray, deputy director of the Pennsylvania Economy League. Along with rising suburban real estate taxes and a menu of other levies, however, it has narrowed some of the tax gap between the city and the suburbs and between the Pennsylvania suburbs and those in New Jersey - with some of the highest property levies in the country but no municipal wage taxes. The suburban wage tax - known more properly as the earned-income tax - is substantially smaller than Philadelphia's. State data show that, within the last four years, property taxes, even after adjusting for inflation and recent reassessments, have increased in 24 of 31 local school districts that have a wage tax. Today, 70 percent - 167 communities in the Philadelphia area - do, solidifying Pennsylvania's national ranking as the state with the highest percentage of communities with wage taxes.What's more, though wage taxes have been used to shift some of the tax burden from real estate, they have proved no guarantee against higher property taxes. In 1960, no Philadelphia suburb had a wage tax. Over the last four decades, hundreds of thousands of suburbanites have fled Philadelphia, bidding an enthusiastic farewell to its wage tax.īut now wage taxes have caught up with them.
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