Statement on HB 1960: Not The Time or Way To Cut Corporate Taxes
By Marc Stier, Director, PA Budget & Policy Center
When the American Rescue Plan (ARP) was enacted, we warned that Republicans in Pennsylvania would use these funds—and the state surplus generated by the faster economic recovery the ARP created—to cut corporate taxes instead of helping Pennsylvanians deal with the after-effects of the pandemic.
Sadly, today that is exactly what happened. The General Assembly has repeatedly failed to help Pennsylvanians who are still hurting from the economic difficulties—both the loss of income generated by business decline, and the current inflation created by a rapid recovery and Russia’s war against Ukraine.
The General Assembly has doggedly rejected Governor Wolf’s proposals to provide assistance to Pennsylvanians with low incomes or those who are having trouble affording child care or housing or paying back student loans.
Yet it rushed today to reduce corporate tax rates.
The General Assembly has rejected proposals to raise the minimum wage or to expand access to health care or rebuild our public health system.
Yet it rushed today to reduce corporate tax rates.
The General Assembly has rejected proposals to fully fund K-12 education and make most expensive higher education system in the country more affordable.
Yet it rushed today to reduce corporate tax rates.
As we have said in the past, there is some justification for reducing corporate tax rates for Pennsylvania based corporations. But there is no justification for moving legislation to do that today without, at the same time, closing the Delaware loophole that allows 73% of the corporations that operate in the state—including extremely wealthy, multi-national corporations—to escape paying any taxes at all.
There is no justification for helping any corporations when we cannot help the working men and women of Pennsylvania, the students of Pennsylvania, or Pennsylvanians who need housing or health care.
Because it includes no provisions to close corporate tax loopholes, HB 1960 will cost the state hundreds of millions of dollars a year. Our initial estimate is that it will reduce state revenues by over $700 million in the fiscal year that begin on July 1, 2023.
Those are funds that should be going to education, housing, child care, and health care- not to the richest Pennsylvanians while we let wealthy multi-national corporations pay no corporate taxes at all.
Poll after poll show that Pennsylvanians want economic justice. They want corporations to pay what they owe. This bill a devastating blow against economic justice in our state and thus against public policies a vast majority of Pennsylvanians support.
We expect Republicans to support terrible legislation like this. Not long ago, House Republican leaders were saying we could not spend our surplus because we are likely to face deficits in the future. Whether that true or not, we knew Republican concerns about long term deficits would disappear when it came to rewarding their corporate donors.
We cannot fathom why any Democrat would vote for this bill. At a time when President Biden has called for higher taxes on billionaires, Democratic members of the PA General Assembly just voted to give them a tax cut.
We call on the Senate to vote no on the bill and for Governor Wolf to announce that he will veto it.
The Pennsylvania Budget and Policy Center is a nonpartisan policy research project that provides independent, credible analysis on state tax, budget, and related policy matters with attention to the impact of current or proposed policies on working families and individuals.
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