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It’s Time for Combined Reporting
Testimony to Senate Finance Committee, June 29, 2023 To print or read full screen. Continue reading
Category: Corporate Taxes
New PBPC Poll on Taxing Corporations and the Ultra-Rich and the Minimum Wage
PBPC commissioned Data for Progress to do a poll of likely voters on a limited number of issues that are at play in the current budget negotiations. The polling memo is below. Three things to note. First, there is overwhelming support (73%) for putting the minimum wage on a path to $15 per hour over four years and thereafter having a yearly cost of living increase (77%). Second, there is overwhelming opposition to cutting corporate taxes. Seventy percent of voters prefer tax increases for billionaires and corporations; only 25% want to see them cut. More than 78% of likely voters want to see the Delaware loophole closed so that multinational corporations can no longer hide their Pennsylvania profits from our Corporate Net Income Tax. And when asked whether some of the $12 billion accumulated state surplus should be devoted to cutting taxes on corporations and the wealthy, only 2% said… Continue reading
Who Runs Harrisburg? You or The Corporate Elite?
Originally published in the Pennsylvania Capital-Star, June 29, 2022. By Nick Pressley and Marc Stier Every rumor we hear about the state budget negotiations tells us that a reduction in the corporate net income tax (CNIT) rate is possible. It is unclear whether that corporate tax cut also includes some of Gov. Tom Wolf’s “add-back” provisions, which would make multinational corporations that currently pay nothing pay something. It appears that Republicans continue to oppose closing the Delaware loophole by enacting combined reporting. Every rumor we hear also says that raising the minimum wage may not be included because Republicans oppose it. Are we talking about cutting corporate taxes because it is a good idea? And is raising the minimum wage less likely because it is a bad idea? I’ll come back to these questions below, but the short answers are “no” and “no.” If they are not bad ideas, then is it hard to raise the minimum wage and easier… Continue reading
Reply to the Pennsylvania Chamber of Commerce’s LTE about Corporate Taxes
The Pennsylvania Chamber of Commerce has responded to our recent op-ed about corporate taxes with a letter to the editor and makes two points, to which I will reply. First, it says that the Delaware loophole was closed a number of years ago by legislation that created some of the add-backs Governor Wolf wants to put in place this year. Our answer: if that legislation really closed the Delaware loophole, then more add-backs and / or combined reporting wouldn’t have any effect and the Chamber would have no reason to oppose them. The proof that the Chamber is blowing smoke is that it opposes further efforts to close the Delaware loophole because its members know that the loophole is still open and closing it would make multinational corporations pay what they actually owe. The notion that combined reporting is complicated and would lead to lawsuits would be news to the… Continue reading
Corporate Taxes Without Combined Reporting Are Not Worth The Cost
STATEMENT: It’s Not the Time or Way to Cut Corporate Taxes
Originally published by the Pennsylvania Budget and Policy Center, April 26, 2022. Statement on HB 1960, which passed the PA House of Representatives today 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 effects of the pandemic. Sadly, today that is exactly what happened. The PA General Assembly has repeatedly failed to help Pennsylvanians who are still hurting from both the loss of income caused 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 who are struggling to pay back student loans.… Continue reading
MEMO: The Corporate Profits Minimum Tax and Why We Need It
Democrats are set to introduce a 15% corporate minimum tax as a funding mechanism for the Build Back Better plan. The Corporate Profits Minimum Tax legislation would ensure that roughly 200 corporations that report more than $1 billion in profits to shareholders pay at least a 15% tax rate on those gigantic profits. It would stop giant, profitable corporations, such as Amazon, Bank of America, FedEx, General Motors, Netflix, and Nike, from escaping all federal taxes. These corporations and others like them make huge profits that they report to their stockholders in filings required by the federal government. But they take advantage of multiple tax loopholes to avoid paying federal corporate income taxes. This new tax would raise roughly $200 billion to $300 billion dollars over ten years. These revenues would enable the federal government to make new investments in helping families with children, health care, child care, elder care,… Continue reading
How Will PA Use Its ARP Funds: for the People of our State or Corporate Tax Cuts
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