PA is Worst in Business Tax Burden

Did you catch the recent depressing news?  Well, it is depressing if you or your spouse own a business, or work for a business, or count on businesses to offer you reasonably priced goods or services in Pennsylvania.  According to The Tax Foundation, Pennsylvania ranked 50th for imposing the heaviest overall taxes on mature businesses.  For those involved in newly established businesses it is better: Pennsylvania is ranked 49th!

The Tax Foundation unfortunately also ranked Pennsylvania the worst for imposing the heaviest taxes on retailers, R+D centers, and on corporate headquarters.  That doesn't leave us with much.  The problem with the tax structure starts, according to the report, with the second highest corporate net income (CNI) tax in America at 9.99 percent.

For years businesses and business organizations have complained about the heavy CNI tax. Indeed, it has been a priority with the business organizations I have worked with, such as the Pennsylvania Chamber of Business and Industry, South Hills Chamber of Commerce, SW PA Regional Advocacy Council, and CompetePA.  CompetePA has made it clear that lowering the CNI tax needs to be THE priority for lowering taxes in Pennsylvania.  The rate punishes PA businesses who remain here and serves as an ugly warning flag for any business considering relocating or expanding into the commonwealth.

It is true that the tax structure is only one of the issues in the business environment.  Access to capital, transportation options and costs, energy costs, available and suitable real estate, skilled workers, demographics and demand issues are just some of the factors businesses consider when looking for a place to do business.  Pennsylvania is not bad on some of these, maybe even good for some, but we are so far behind the power curve due to the taxes.

How did we get here?  My observation as a business owner and political observer: time and time again, when the General Assembly has been in a pinch and needs more revenue they go to the apparent bottomless pot of money - businesses. 

We need to reform and reduce the business and job crushing taxes in Pennsylvania without delay.  We can't afford the dubious distinction as worst in the U.S. anymore. May I suggest we start this year with a reduction in the CNI tax?