Pa. Business Climate Rated Unfriendly

Wednesday, 10 Oct 2012 12:10 PM

By Sandy Fitzgerald

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Pennsylvania’s corporate tax rate, the second-highest in the country, is making it difficult to lure employers seeking a climate friendly to businesses, says a report from the Washington-based  Tax Foundation.
 
According to the Pittsburgh Tribune-Review, the state’s corporate net income tax, at 9.99 percent, produced $2.13 billion in the 2010-2011 fiscal year, up from $1.79 billion the year . Iowa, at 12 percent is the only state with a higher rate.
 
Pennsylvania’s outlook wasn’t all bad, however. It placed 19th among states when the Tax Foundation considered personal income, excise, and business tax rates together. The state’s 3.07 flat personal income tax rate is one of the lowest, and the state’s mid-range base 6 percent sales tax rate helped offset the corporate tax category.
 
Still, Leo Knepper, executive director of Citizens Alliance of Pennsylvania, complained the state has to "outright bribe businesses to move here."
 
"If we would take the energy that we’re putting into these targeted incentives and make the tax climate more competitive, we’d be a lot better off.”
 
At least one long-time Pennsylvania employer - the Yuengling & Sons brewery -
has signaled that its future expansion plans may take place in other states with lower corporate rates and more competitive incentives. The Pottsville brewery is one of the oldest and the largest American-owned breweries in the country.
 
Business-friendly tax reforms have passed as part of Republican Gov. Tom Corbett’s budget package for next year, Steve Kratz, a spokesman for the Department of Community and Economic Development. told the Tribune-Review. But he admitted the state may need to do more, given its history of having high taxes and tough regulations.

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