{"id":8750,"date":"2020-01-27T22:40:00","date_gmt":"2020-01-28T03:40:00","guid":{"rendered":"http:\/\/marcstier.com\/blog2\/?p=8750"},"modified":"2020-12-28T22:50:12","modified_gmt":"2020-12-29T03:50:12","slug":"corporate-tax-cuts-since-2002-now-cost-pa-4-2-billion-yearly-pennsylvania-should-pass-worldwide-combined-reporting","status":"publish","type":"post","link":"https:\/\/marcstier.com\/blog2\/?p=8750","title":{"rendered":"Corporate Tax Cuts Since 2002 Now Cost PA $4.2 Billion Yearly: Pennsylvania Should Pass Worldwide Combined Reporting"},"content":{"rendered":"\n

Originally published at KRC-PBPC here.<\/a><\/p>\n\n\n\n

By Stephen Herzenberg, Diana Polson, and Marc Stier<\/p>\n\n\n\n

This paper focuses on\u00a0the details of\u00a0one part of this story:\u00a0the cuts in corporate taxes\u00a0in Pennsylvania\u00a0since 2002\u00a0that have\u00a0reduced revenues\u00a0by\u00a0what is now\u00a0$4.2 billion per year\u00a0and\u00a0have\u00a0created a tax system that is among the most unfair in the country.\u00a0\u00a0<\/p>\n\n\n\n

Pennsylvania\u2019s 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\u2014the 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 <\/p>\n\n\n\n

This policy brief updates estimates of the cost each year to the Pennsylvania budget from corporate tax cuts since 2002-03 and shows how this has eroded the contribution of corporate taxes to state General Fund revenues. The brief closes by proposing a solution\u00a0that eliminates\u00a0the\u00a0tax loopholes\u00a0that allow corporations to shift profits from Pennsylvania to other states:\u00a0combined reporting.\u00a0Combined reporting\u00a0has\u00a0already\u00a0been\u00a0adopted by\u00a028 states and the District of Columbia. We propose going even further\u00a0and\u00a0propose\u00a0limiting\u00a0corporations\u2019 ability\u00a0to shift reported profits overseas\u00a0by adopting worldwide combined reporting.\u00a0<\/p>\n\n\n\n\t\t

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