STATEMENT: It’s Not the Time or Way to Cut Corporate Taxes

Marc Stier |

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.

Yet it rushed today to reduce corporate tax rates.

The General Assembly has rejected proposals to raise the minimum wage, expand access to health care, and rebuild our public health system.

Yet it rushed today to reduce corporate tax rates.

The General Assembly has rejected proposals to fully fund K-12 education and to make the most expensive state higher education system in the country more affordable.

Yet it rushed today to reduce corporate tax rates.

As we have said in the past, there is some justification for reducing corporate tax rates for Pennsylvania-based corporations. But there is no justification for moving legislation to do that today without closing the Delaware loophole, which allows 73% of the corporations that operate in the state—including extremely wealthy, multi-national corporations—to escape paying any taxes at all.

There is no justification for helping corporations when we cannot help the working men and women of Pennsylvania, the students of Pennsylvania, or Pennsylvanians who need housing or health care.

There is no justification for making the 17 billionaires in Pennsylvania richer when the state won’t help people who are struggling every day to buy groceries and gasoline and pay for their housing and health care.

Because the legislation includes no provisions to close corporate tax loopholes, HB 1960 will cost the state hundreds of millions of dollars per year. Our initial estimate is that it will reduce state revenues by over $700 million in the fiscal year that begins on July 1, 2023.

Those are funds that should be going to education, housing, child care, and health care—not to the richest Pennsylvanians, while we let wealthy, multi-national corporations pay nothing in corporate taxes.

Poll after poll shows that Pennsylvanians, like people all over the country, want economic justice. They want corporations to pay what they owe. This bill is a devastating blow against economic justice in our state and against public policies that a vast majority of Pennsylvanians support.

We expect Republicans to support terrible legislation like this. Not long ago, House Republican leaders were saying we couldn’t spend our surplus because we are likely to face deficits in the future. Whether that’s true or not, we knew Republican concerns about long-term deficits would disappear when it came to rewarding their corporate donors.

We cannot fathom why any Democrat would vote for this bill. At a time when President Biden has called for higher taxes on billionaires, Democratic members of the PA General Assembly just voted to give them a tax cut.

We call on the Senate to vote NO on the bill and for Governor Wolf to announce that he’ll veto it.