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Cutting Corporate Taxes Hasn’t Worked: Why PA Is Still Short on Necessary Funding
Originally published by KRC-PBPC here. Continue reading
Category: Pennsylvania State Taxes
Corporate Tax Cuts Since 2002 Now Cost PA $4.2 Billion Yearly: Pennsylvania Should Pass Worldwide Combined Reporting
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
Corporate Tax Cuts Since 2002 Cost PA $4.2B Annually
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
How the ‘Fair Share Tax’ will restore fairness to our tax system
Originally published by the PA Capital-Star on April 24, 2019 Pennsylvania politics remains divided. One side, composed of mostly conservatives, believes that the key to prosperity is to cut taxes for the rich, cut spending for everyone else and—although they don’t say it too loudly—keep wages low. The other side, composed of mostly liberals, believe that a prosperous Pennsylvania needs to close our public investment deficit. They point out that state spending as a share of gross state product has fallen by 12 percent compared to the years 1997-2011. That has left us with: K-12 schools that remain among the most unequal in the country, leaving too many of our children to receive an inadequate education; state spending on higher education that is half of what it was in 1983-84, leaving us fourth from the bottom among all states in per capita spending and 40th of 50 states in the percentage of adults with more than… Continue reading
A Fair Share Tax Plan for Pennsylvania–2019 Update
By Marc Stier and Diana Polson Originally publish by KRC-PBPC This paper puts forward the Fair Share Tax plan, a major step toward fixing Pennsylvania’s broken tax system and raising the revenues we need to invest in the public goods that are critical to creating thriving communities and individual opportunity in our state: education, infrastructure, protection for our air and water, and human services. The calculations included in this plan are an update to similar proposal put forward by the PA Budget and Policy Center in 2017. The proposal that would raise $2.2 billion annually, while cutting taxes or leaving them level for 82% of Pennsylvanians. Click here to read or download the full proposal. See how Pennsylvanians in each state House and Senate district would fare under the Fair Share Tax Plan here. Continue reading
No Time For Giving Up
Update noon, October 18: There is talk around the Capitol that a shale tax will come out of the House Finance Committee today and coming to a vote on the House floor later this week. This legislation must be part of the budget this year. It is the difference between a budget that takes a step forward to address our long-term budget problems and one that makes those problems worse. Marc Stier, director of the Pennsylvania Budget and Policy Center, released the following statement on the revenue plan passed by the Pennsylvania House of Representative last night: “The tax code bill passed by the Pennsylvania House of Representatives last night is a white flag raised by the leaders of both parties, who are evidently willing to surrender to another year of make-believe budgeting rather than fight for a solution to the state’s persistent budget shortfalls. “A shale tax, which would… Continue reading
Don’t Let the Extremists Win
There are lots of rumors about a budget deal flying around Harrisburg but few details and even less assurance that votes will be found to approve in the House and the Senate. What little we hear is concerning. And the best way to understand our concerns is to look again at why we have not reached a deal until this point—extremists control the Republican Party in the House. There is a broad agreement among Democrats and most Republicans that Pennsylvania has a structural budget deficit (which simply means that year after year revenues will not pay for state expenditures, either those approved by the General Assembly this year or those demanded by Pennsylvania voters). There is broad agreement among Democrats and most Republicans that we need new tax revenues to close the deficit this year and in the future. And there is broad agreement that a severance tax should be… Continue reading
Time to fix our upside-down tax system
Originally published by the York Dispatch, December 23, 2016 Pennsylvania has been struggling with persistent budget deficits since the start of the Great Recession in 2008. And we at the Pennsylvania Budget and Policy Center have been recommending a “balanced approach” to resolving the deficit from the beginning, one that combines restraint in spending with new revenues. But since 2010, under Gov. Tom Corbett and Gov. Tom Wolf, the General Assembly has adopted an unbalanced approach. Spending has gone down but revenues have gone down faster. From 1994 to 2011, under both Democratic and Republican governors, the state spent 4.7 percent of the state’s GDP. During the Corbett years, that fell to 4.3 percent as spending on education and human services were sharply cut. And while, thanks to Wolf, the state has been able to restore some of those cuts, spending in the last two years remains at the same level as… Continue reading
The rich can take the hit–to fix the budget they should pay their fair share.
Marc Stier | 01/17/2017 Blog This piece originally appeared on Pennlive, December 23, 2016. You remember how Lucille Ball would work her way into some kind of predicament and then look around and wonder how she got there? That’s how our state legislators seem to look at the budget deficit we are stuck with right now. They are looking around wondering how the current Pennsylvania budget deficit, which approaches $3 billion for this year and next year together, happened. But it didn’t just happen. It was the product of a series of long-term and short-term decisions made by legislators, sometimes with the help of our governors. Let’s start, however, with what did not cause the budget deficit, because too many of our legislators, like Lucy, want to blame someone else for the mess they have made. Growth in state spending is not the cause of budget deficits. From 1994 to… Continue reading
Combine spending restraint with new revenue
This piece originally appeared in the Erie Times-News, December 28, 2016. Pennsylvania has been struggling with persistent budget deficits since the start of the Great Recession in 2008. And we at the Pennsylvania Budget and Policy Center have been recommending a “balanced approach” to resolving the deficit from the beginning, one that combines restraint in spending with new revenues. But since 2010, under Govs. Tom Corbett and Tom Wolf, the General Assembly has adopted an unbalanced approach. Spending has gone down but revenues have gone down faster. From 1994 to 2011, under both Democratic and Republican governors, the state spent 4.7 percent of the state’s gross domestic product. During the Corbett years that fell to 4.3 percent as spending on education and human services were sharply cut. And while, thanks to Wolf, the state has been able to restore some of those cuts, spending in the last two years remains… Continue reading