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If a push for state tax reform is successful, the city of Philadelphia might be able to levy higher tax rates on more wealthy households and commercial buildings — but it’s a long shot.
A somewhat obscure sentence in the Pennsylvania Constitution written more than 150 years ago known as the uniformity clause requires all state and local taxes to have the same percentage for all properties and taxpayers.
That means the property tax rate for both a commercial building and a residential home in the city is the same — a tax rate of 1.3998% that’s split between the city and the School District of Philadelphia.
The property tax bill of the Loews Hotel in Center City, for example, was $1.3 million in 2024 for a building with an assessed market value of $95 million. A neighborhood rowhouse with an assessed market value of $274,000 would pay about $3,800 in property taxes.
But if the tax rate for commercial buildings were higher — like a previously proposed 15% — that bill would be closer to $14.2 million for the city’s coffers.
Likewise, the city wage tax and state income tax rates are the same for households earning $400,000 or $40,000.
South Philly state Rep. Elizabeth Fiedler, who represents the 184th District, introduced a bill to repeal the state uniformity clause this year.
“Our tax system is unfair,” Fiedler said. “One of the biggest challenges that we face in making our tax system more fair is what’s called the uniformity clause. It really shields the super rich from paying their fair share of taxes. I think we need to have a tiered income tax system in Pennsylvania.”