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Should Philadelphia's suburbs help their central city?

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  • Robert Inman
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    Abstract

    We end with the age-old debate of city vs. suburbs. The United States is unique in its commitment to local government as the primary provider of essential public services and in its use of local taxes as the primary means for paying for these services. The Philadelphia metropolitan area is typical of the U.S. pattern. But Philadelphia faces the burdens and responsibilities of all older central cities, including a higher proportion of poor residents than its surrounding suburbs. Such circumstances lead the city to impose higher taxes, but raising revenues through higher taxes becomes self-defeating when tax rates drive people and businesses away. The result is a weaker city and regional economy. How can Philadelphia strengthen its finances? In "Should Philadelphia's Suburbs Help Their Central City?" Bob Inman proposes a targeted program of suburban assistance to lower the commuter wage tax and presents evidence that such a program is likely to benefit city and suburban residents alike.

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    File URL: http://www.phil.frb.org/files/br/brq203ri.pdf
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    Bibliographic Info

    Article provided by Federal Reserve Bank of Philadelphia in its journal Business Review.

    Volume (Year): (2003)
    Issue (Month): Q2 ()
    Pages: 24-26

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    Handle: RePEc:fip:fedpbr:y:2003:i:q2:p:24-26

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    Postal: 10 Independence Mall, Philadelphia, PA 19106-1574
    Web page: http://www.philadelphiafed.org/
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    Related research

    Keywords: Cities and towns ; Philadelphia (Pa.);

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    Cited by:
    1. Andrew Haughwout & Robert Inman & Steven Craig & Thomas Luce, 2004. "Local Revenue Hills: Evidence from Four U.S. Cities," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 570-585, May.
    2. Robert Inman, 2005. "Financing Cities," NBER Working Papers 11203, National Bureau of Economic Research, Inc.

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