Closing the Delaware Loophole - State Revenue and Pitt

This article briefly summarizes the current state of business taxes in the Commonwealth. As the article notes, the corporate tax for the state of Pennsylvania is one of the highest in the country, which many see as prohibiting the movement of companies into the state. However, through various tax loopholes, many multistate companies are avoiding the state taxes entirely According to a 2010 report by the Pennsylvania Budget and Policy Center, a staggering “71 percent of companies subject to the corporate net income tax pay no tax.”

Although many people have issues with the bill as introduced (See here for a politician who explains its shortcomings) many have cited the policy of closing the loopholes in general as a way of raising revenue for the state, and to potentially offset the cuts to education. Although it would lower corporate tax rates, if effective in closing the loopholes this bill could potentially raise state revenues significantly.

Although politicians disagree about the effectiveness of this particular bill, this has demonstrated bipartisan support for closing a loophole that many see as having cheated the Commonwealth out of millions of dollars. If this bill is effective, it could result in a larger flow of revenue and, as some advocates hope, a way to end the cuts to higher education.