Late last week, when many of us were focused on the struggle in Wisconsin between working people and the middle class on the one hand, and the corporate backed governor of Wisconsin on the other, that fight came to Pennsylvania.
Republican Governor Tom Corbett’s Department of Revenue adopted new tax regulations that will reduce the corporate income tax by $200 million in 2010 and $833 million over two years.
(If you don’t need to read more to know what you think about that, sign the Penn ACTION / Keystone Progress petition against this corporate giveaway here.
And, at almost the same time AdultBasic, which provides health insurance for 42,000 working Pennsylvanians who do not qualify for medical assistance, ran out of money. Governor Corbett did nothing to save AdultBasic.
What would it have cost to extend AdultBasic for another year? Just a bit less than the $200 million in Tom Corbett’s first payment to the largest corporations of Pennsylvania.
Budgets are documents that put our moral ideals into practice. Last week, the Governor of the Commonwealth made his radical right wing morality clear for all to see when he decided to put the profits of corporations over the needs of the people.
At a time when the state is facing budget deficit of between $3.5 and $4 billion dollars and when the Governor’s staff has already indicated that he will close this deficit by large cuts in spending for education, medical care, and other programs that make a difference in the lives of working people and the middle class, a $833 million handout to the CEOs who so handsomely contributed to his campaign is unconscionable.
As usual, this handout to the wealthy corporate leaders who back Republican candidates is dressed up in economic jargon about creating jobs. As usual, that jargon is a smokescreen designed to hide their real intention.
The new regulation will allow Pennsylvania corporations to deduct 100% of qualified business expenses in the first year instead of over a number of years. The Governor’s Department of Revenue says that this will lead to new investments in Pennsylvania that will create jobs.
But Tom Corbett’s people don’t tell us that this tax break will go to corporations that invest in other states as well as in Pennsylvania.
Tom Corbett’s people don’t tell us that economists who advise Republicans, such as Mark Zandi, admit that we get only 27 cents of new economic activity for every dollar of tax cuts we give large corporations.
And Tom Corbett’s people don’t tell us that a $200 million reduction in state spending will cost far more jobs than this new tax break will create. Keystone Research Center’s analysis suggests that a $833 million reduction in state spending will lead to a loss of 15,000 jobs statewide, including 6,000 in the private sector.
The Governor’s Department of Revenue tells us that accelerated depreciation merely puts off tax collection for a number of years.
But Tom Corbett’s people don’t tell us that the state desperately needs revenue this year, not three years from now when the economy will have recovered.
And Tom Corbett’s people don’t remind us that he intends to reduce corporate tax rates further when the economy improves, which means that the lost revenue will be gone forever.
The issue raised by this tax cut is not an administrative question. It is not a technical question. It raises the most fundamental questions about the nature of our political community: Will we continue to be a commonwealth, in which our government serves the interests of all Pennsylvanians, or will we be a joint stock company in which we have government of, by, and for the corporate elite.
All over America, Republican governors and legislators are moving an agenda that serves the wealthy corporate executives who bankrolled their campaigns at the expense of working people and the middle class. Their radical goal is now obvious, to continue the upward redistribution of income that has shattered the middle class while enriching those in the top ½ of 1%.
With this action, Tom Corbett makes clear, even in advance of the budget he puts forward next week, which side he is on.
Tom Corbett has shown us that, unless you head a huge corporation or make $5 million a year, he’s not on your side and you should sign the Penn ACTION / Keystone Progress petition against this corporate giveaway here.