Harrisburg, PA — Today at 10:30 AM EST, State Reps Fiedler and Innamorato joined the PA Budget and Policy Center (PBPC) to announce the release of a new report calling on the state to close the Delaware loophole that allows 73% of corporations that do business in PA—including most wealthy multinational corporations—to escape from paying any corporate taxes before reducing the corporate net tax rate.
PBPC’s research shows what the experience of other states has also shown—corporate tax cuts do not create many jobs, are highly unlikely to generate a great deal of economic growth, and they come at an extraordinary cost. Investing the same amount of state funds in K-12 or higher education, or in rebuilding our infrastructure, is likely to generate far more jobs and have a positive long-term impact on people’s well-being and on their communities’ economic prospects.
Marc Stier, Director of the PA Budget and Policy Center, summed this up in his remarks: “Our report shows that corporate taxes make up only .3 to .4% of the costs of doing business. Labor, transportation and communication costs are far greater. That’s why investing in education at all levels and our infrastructure is a far better use of state funds than cutting corporate taxes.”
Representative Sara Innamorato stated, “We need a tax code that is rooted in fairness, one that rewards work and ends the special loopholes for the richest,” Innamorato said. “It’s time for corporations – many of which are reporting record profits, even as families struggle – to pay their fair share. My colleagues and I have proposed numerous changes to the tax code that would hold corporations accountable and give working families a break.”
“Families are feeling the rising cost of groceries, gas and baby formula. It’s appalling to me that our state would consider giving a big tax break to mega corporations right now. These bills will reduce state revenues by over $600 million next year. These funds should be going to education, parks, libraries, housing, child care, and health care—not big corporations and the very richest Pennsylvanians,” adds Representative Elizabeth Fiedler from Philadelphia, who closed out the event.
Allowing some corporations based outside the state to pay nothing, while corporations based solely in Pennsylvania pay a relatively high corporate tax rate, harms the small, local businesses that create most of our jobs.
At a time when Pennsylvanians need help from their state, as well as the federal government, to deal with post-pandemic economic difficulties—including the rise in prices for housing, child care, and gas—it is obscene that the Republican leadership seek to cut the corporate tax rate while blocking legislation that would deal with those problems. This legislation would cost the state over $600 million a year and provide unnecessary benefits to billionaires, many of whom have seen their wealth double or triple during the pandemic, while doing nothing for most Pennsylvanians.
Read the full report here: https://krc-pbpc.org/wp-content/uploads/Not-the-time-for-corporate-tax-cuts.pdf
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