At 9.99% PA’s Corporate Net Income Tax is the 2nd highest in the U.S. and our Capital Stock and Franchise Tax, a 1.89-mill levy on corporate infrastructure (given the budget) may not expire in 2011 as planned. With taxes like these it’s no wonder Rendell is scrambling to keep manufacturing jobs in the Keystone State.
In a recent Central Penn Business Journal article PMA’s Dave Taylor points out, “Most states make businesses pay one or the other, not both. Thereâ€™s a lot of reasons why businesses choose to locate in an area, but taxes are the marquis because itâ€™s easy to calculate.”
Recently, PA offered Carlisle Tire and Wheel (340 jobs) $6.9 million to stay in Pennsylvania, but Tennessee offered a sweeter deal – reportedly three times that amount. Obviously, Rendell hopes his current mission to woo Harley Davidson with $15 million is more successful.
Instead of competing with other states to offer more goodies for business Pennsylvania should lower taxes. These perks cost taxpayers more money in administrative costs, allow the government – not the consumer – to pick winners, and actually slows economic growth. Cutting taxes and corporate welfare would shrink the state bureaucracy while growing the economy – just ask Texas.