With the city of Philadelphia still staring over the precipice of our own fiscal cliff, with local unemployment still north of 10 percent for some demographics and a shrinking tax base - it makes good sense for city officials to try to collect some of the $515 million outstanding in unpaid back taxes.
So while we applaud Mayor Michael Nutter’s latest proposal to clamp down on delinquents and tax cheats, announced Monday afternoon at a city hall press conference, we would still urge caution in implementation of the new plan.
There are elements to the plan that make perfect sense, and we hope are adopted. Among them, the city will begin to call delinquent taxpayers 30 days after their tax bill slides into delinquency, rather than wait months, or even years, to contact the taxpayer.
The city will also begin using a computer system, using analytics which study the taxpayers’ spending behavior in an effort to determine who is most likely to pay, and who isn’t. The city will also ask the state’s general assembly to allow Philadelphia to add the cost of collection to any balance due. Previously, the city had to pay collections agencies out of the principal of money received, so the rest of taxpaying Philadelphians had to eat the cost of collecting from their negligent neighbors.
Where the plan gives us pause is the request for applying tax liens, freezing the bank accounts belonging to delinquent taxpayers and the ability to garnish their wages - taking the city’s money off the top of their weekly paycheck.
While such steps are doubtless necessary to convince the truly unrepentant tax dodger that they mean business, we hope the city will use wisdom, discretion, and common sense when deciding who deserves a gentle nudge, and who deserves the hammer.
There are individual tax delinquents in this city who owe thousands, even hundreds of thousands, of dollars in unpaid tax bills. The mayor himself called out many of these people a few years ago, when he published their names online, along with the astronomical amounts owed.
They deserve the hammer. But struggling homeowners, who may have temporarily fallen behind through a loss of employment, or divorce, or some other unforeseen circumstance shouldn’t be treated that way, and should be given every reasonable opportunity to get back on their feet without worrying about their meager bank account being frozen or losing a substantial portion of their small paycheck.
They are the low hanging fruit, and it would be very easy, and perhaps politically advantageous, to pump up the collection numbers by going after the weakest and most vulnerable.
But it would be wrong.