State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.
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Wolf talks taxes

Written by Mary Wilson, Former Capitol Bureau Chief | Feb 24, 2014 5:34 PM

Photo by Mary Wilson / witf

One of the eight Democratic candidates for governor is linking efforts to reduce the state's business taxes to tightening tax loopholes.

Tom Wolf, a York County businessman and former revenue secretary, said Pennsylvania could be better for businesses and job creation but for one problem.

"The corporate net income tax is much too high," Wolf said at the Pennsylvania Press Club luncheon in Harrisburg Monday. "It's the second-highest marginal rate, but it's the highest average tax rate for corporations in the United States. We could drop that dramatically if we actually went to a point where everybody paid it."

Business advocates have bemoaned the 9.99 percent rate. Last year Governor Corbett's administration proposed lowering it over a 10-year span. But the governor's budget secretary has recently said lowering the rate would be too costly for the commonwealth right now.

Wolf said the rate can be reduced without losing money for the commonwealth. "Get rid of loopholes," he said. When pressed for examples, he added: "Like the Delaware Loophole. That's the biggest one. That's the biggest one I'd look at."

Supporters of a law signed last summer say they've closed the so-called Delaware loophole, which allowed companies to avoid state taxes. Some critics say there's more the state could do to tighten things up.

Others in the Democratic gubernatorial primary have homed in on the Delaware loophole in the past, most recently at a candidates' forum in Philadelphia earlier this month.

But those who worked on the Delaware loophole legislation last year are none too keen on further action to crack down on businesses that try to avoid state taxes.

"The issue is over," said Todd Brysiak, a former House staffer now working for the Pennsylvania Chamber of Business and Industry. He questions claims that companies are still exploiting the loophole and counters that any additional restrictions would raise taxes on all businesses - whether or not they're trying to avoid Pennsylvania taxes.

Published in State House Sound Bites

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