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Corporate Tax Cuts Since 2002 Now Cost PA $4.2 Billion Yearly: Pennsylvania Should Pass Worldwide Combined Reporting

  By PA Budget and Policy Center, Pennsylvania State Taxes, Policy reports, Taxation

Originally published at KRC-PBPC here. By Stephen Herzenberg, Diana Polson, and Marc Stier This paper focuses on the details of one part of this story: the cuts in corporate taxes in Pennsylvania since 2002 that have reduced revenues by what is now $4.2 billion per year and have created a tax system that is among the most unfair in the country.   Pennsylvania’s tax-cutting, shaped by the corporate-sponsored narrative, has taken a variety of forms. Under both Republican and Democratic governors, we have entirely eliminated one of our two major taxes on corporations, the Capital Stock and Franchise Tax (CSFT). We have also allowed businesses to lower their reported profits subject to the largest remaining corporate tax—the Corporate Net Income (CNI) tax. And we have continued to give multi-state corporations free rein to cook their books and exploit corporate tax loopholes to their reported income subject to the CNI. The result is that 73% of corporations that do business in Pennsylvania pay no corporate income tax at all.1  This policy brief updates estimates of the cost each year to the Pennsylvania budget from corporate… Continue reading

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Corporate Tax Cuts Since 2002 Cost PA $4.2B Annually

  By Corporate Taxes, Diana Polson, Pennsylvania, Pennsylvania Budget, Pennsylvania State Taxes, Stephen Herzenberg, Taxation

By Stephen Herzenberg, Diana Polson, and Marc Stier Closing Delaware loophole, instituting worldwide combined reporting would level the playing field for small businesses and generate over $700 million a year to invest in PA communities This paper focuses on the details of one part of this story: the cuts in corporate taxes in Pennsylvania since 2002 that have reduced revenues by what is now $4.2 billion per year and have created a tax system that is among the most unfair in the country.   Pennsylvania’s tax–cutting, shaped by the corporate-sponsored narrative, has taken a variety of forms. Under both Republican and Democratic governors, we have entirely eliminated one of our two major taxes on corporations, the Capital Stock and Franchise Tax (CSFT). We have also allowed businesses to lower their reported profits subject to the largest remaining corporate tax—the Corporate Net Income (CNI) tax. And we have continued to give multi-state corporations free rein to cook their books and exploit corporate tax loopholes to their reported income subject to the CNI. The result is that 73% of corporations that do business in Pennsylvania… Continue reading

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Trump’s Nihilism and How to Defeat It

  By Philosophy, Politics, Resisting Trump

I wrote the first four paragraphs on Facebook on August 3, 2016. Trump’s Nihilism The Trump campaign reminds me that a central element of fascism and its appeal is the embrace of nihilism. One way to understand nihilism is as the denial that there is any meaning or truth or purpose beyond our will. Nihilism both describes the “philosophy” of Trump’s political practice—it’s utter disregard for any norms of conduct and any standards of argument and evidence—and his appeal to the people in America who have seem to lost their sense of purpose and connection to one another or ideals beyond themselves.  Trump’s pursuit of power for its own sake answers to that loss of purpose as does his willingness to create chaos. As Nietzsche put it, “man would rather will nothingness than not will.” Trump’s readiness to break up NATO; his lack of concern about causing a collapse in… Continue reading

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The 2019-20 Enacted Budget: How Did Education Fare?

  By Budget analysis

Originally published by KRC-PBPCP here. By Diana Polson and Marc Stier While this 2018-19 budget increase moves us in the right direction with increased funding for education, it still does not adequately and equitably fund our schools across the Commonwealth. In order to do that, Pennsylvania must find recurring revenue sources. Read the Overview of the 2019-20 enacted budget for education below. Continue reading

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On Today’s Ruling on the Affordable Care Act Individual Health Insurance Mandate

  By Health Care, PA Budget and Policy Center, PBPC Blog posts

Originally published at KRC-PBPC here. Today’s 2-1 decision by a federal appeals court rules the ACA’s requirement that people have health insurance is unconstitutional because Congress has repealed the tax penalty for those who don’t have health insurance. But it steps back from the conclusion reached a year ago by Federal Judge Reed O’Connor that the entire ACA is unconstitutional. Both parts of the decision were expected by reasonable legal scholars. The individual mandate was upheld by the Court in NFIB v. Sibelius in 2012 on the grounds that it was an exercise of Congress’s power to tax individuals. The repeal of the tax undermined this rationale for the individual mandate put forward by Chief Justice Roberts in that case. Judge O’Connor went much further and argued that without the individual mandate, the entire ACA is unconstitutional, even though there was no explicit indication in the law that said the… Continue reading

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Judicial Gerrymandering is Back

  By Constitutional Law and Civil Liberties, Courts, Judicial Gerrymandering, PA Constitutional Law

Originally published by KRC-PBPC here. Republicans who control the Pennsylvania House of Representatives couldn’t find time to raise the minimum wage this week. But they did find time to take revenge on Pennsylvania judges for protecting our rights to vote and to have Congressional districts that are not gerrymandered in their favor. They did this by passing a proposed amendment to the Pennsylvania Constitution that will change how we elect judges and justices to our appellate courts, including our Supreme Court. Instead of electing them statewide, if this amendment becomes part of our Constitution, we will elect them from districts that, of course, would be drawn by members of the General Assembly. As we explained in detail in this blog post, this proposed amendment will, in two ways, give the General Assembly far more influence over the courts than is appropriate in a government that respects the separation of powers. By… Continue reading

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Yes, the U.S. Constitution could be improved. The process in this Pa. House resolution isn’t a path forward

  By PA Budget and Policy Center, Published Op-Eds, US Constitution

Originally published by the PA Capital-Star on December 18, 2019. On Monday, the House State Government Committee passed a resolution asking Congress to call a constitutional convention, pursuant to Article V of the U.S. Constitution. It’s not hard to understand the temptation to support this resolution. We live at a time of political division in Pennsylvania and in our country as a whole. We are all tempted to think about whether some change in our constitution might help us resolve our difficulties. It’s useful to start thinking about these issues. However, as a political scientist who has thought long and hard about our constitution, my own ideas on the matter are not terribly fixed, simply because the question is so difficult and the considerations that should weigh on us in examining changes in a constitution that has served us so well require the time for serious thought and substantial debate. But… Continue reading

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Why We Have to Fight, Part 2

  By 2020, Elections, Politics

It appears my post on the importance of not backing down from a strong progressive program has been controversial. Good—it was meant to be. There were a lot of good arguments made in response and I want to draw on some of them as I deepen the case for a bold progressive Democratic campaign in 2020. We live in a moment in our politics that is radically different than what many of us have experienced. So it’s no accident that it’s by and large younger people who can see what many of their elders cannot see.  Still the period in which we live is not without historical precedent. Indeed if you look back at the history of our country there have been periods like our own in-between a number of periods, like the one we boomers grew up in. For most of my life, as for most of the life… Continue reading

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Why We Have to Fight, Part 1

  By 2020, Elections, Politics

I’m seeing lots of posts from folks on the center-left about how people in rural PA or Michigan or Tennessee or Texas don’t like some part of the Sanders or Warren agenda.  It’s one thing to worry about the electoral consequences of these proposals. I will address that question another time. But I’m concerned that people who should be on our side are overstating the electoral problems in part because they think it’s somehow illegitimate for us to put forward ideas that aren’t embraced by almost everyone.  This is a long-standing problem among liberals. There is a strand of liberalism that is afraid of political power and will do everything it can to avoid exercising it. This same strand of thought makes it hard for liberals to bear disagreement.  That strand is connected to another that vastly overestimates the power of argument-—as opposed to numbers and organizing—in politics.  Robert Frost… Continue reading

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Some Questions About the Warren Plan for M4A

  By 2020, Elections, Health Care, Public Policy

This is the second of two post on the Warren plan to finance Medicare for All. The first dealt with why I think the time is ripe for M4A and especially for Warren’s version of it. This second post is about some questions that have been raised about Warren’s plan from the left. The Warren plan calls on businesses that have 50 or more employees and provide health insurance to them to pay a the federal government roughly 98% of what they pay for that insurance. A critique of the plan in Jacobin said that businesses would be able to escape from this requirement by reclassifying employees as independent contractors or by breaking themselves down into units with 49 or fewer employees. The whole question of reclassifying employees as independent contractor is not a new issue. There already are many incentives to do that. There are also business incentives to not… Continue reading