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Philadelphia Needs to be More Business-Friendly

It's become apparent to me in two years of living in Philly that starting a new business is a regulatory nightmare: I spent this year watching an acquaintance delay the opening of a new coffee shop from the beginning of the summer to the end largely because of the runaround he got from the Licenses & Inspection Department. There's also the oppressive tax situation: When bloggers get hit with a hefty business tax because they earned a few dollars in Google AdSense revenues, you know the situation's out of whack.

So Robert McNamara's op-ed in today's Inky rings true to me: This city really is strangling entrepreneurship:

All too often, city rules and regulations boil down to the whim of the inspector or official an entrepreneur is dealing with. All too often, their whim is simply to say "no." Instead of giving new businesses the time and space they need to grow, the city immediately hits them with an array of taxes, fees, and demands that are simply implausible, like requiring a start-up business to waste precious and often limited financial capital renting commercial office space instead of operating out of an entrepreneur's home.

The city's rampant overregulation, tremendous burdens placed on would-be entrepreneurs, and, above all, the pervasive culture of "no" are putting a stranglehold on entrepreneurial activity. Wracked by a budget crisis, the city inexplicably continues to expend extraordinary resources making it more difficult to start businesses, which could be expanding the city's tax base.

There are some solutions out there! Council members Bill Green and Maria Quinones-Sanchez have introduced a bill that, among other things, would exempt a new business' first $100,000 in sales from the city's business tax. I don't know all the fiscal implications of this -- Philadelphia, like other cities, has had its share of budget problems in recent years -- and I'm generally not a believer that reducing taxes results in increased tax revenues. But I suspect that making it easier for entrepreneurs to get started in Philadelphia can only help the city's tax base over time. What we're doing right now isn't working.


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