Cities Trim Pass-Through Credits

City leaders can raise near‑term revenue by reducing the refundable credit associated with state and local pass‑through entity taxes (PTET), effectively converting a business‑level workaround into a municipal income‑tax increase aimed at high earners. Because PTET receipts concentrate in sectors with volatile capital‑gains income and involve matching credits at the individual level, the net revenue is hard to forecast and risks accelerating tax‑base flight. — This shows a novel municipal lever—re‑writing how PTET credits are applied—that blends tax engineering, fiscal management, and redistributive politics, with implications for revenue stability and high-earner mobility.