Hutchinson highlights cut in corporate income tax
State Sen. Scott Hutchinson is highlighting a slate of corporate tax cuts aimed at making Pennsylvania “far more competitive with other states.”
“The phase-out of Pennsylvania’s sky-high Corporate Net Income tax got underway this month, part of our efforts to keep good jobs here and create new ones,” he said in a newsletter to constituents.
According to the Department of Revenue, the rate will be 8.99% this year, dropping 0.5% each year until January 2031 when the rate will hold at 4.99%.
“As chairman of the Senate Finance Committee, I worked with fellow Republican lawmakers to secure a cut in this job-killing tax as part of the 2022-23 state budget,” Hutchinson said. “Before this recent reduction to 8.99%, Pennsylvania’s CNI tax had been 9.99% for nearly three decades while most other states had lower tax rates — some far lower — and many have been lower for almost as long.”
And he highlighted some of the problems that the prior rate may have been causing.
“When gradually reduced to 4.99% in 2031, Pennsylvania’s CNI rate will have gone from one of the highest in the nation to one of the lowest, making the commonwealth far more competitive with other states,” he said. “As Finance Chairman I will continue to press for a more aggressive timeline in reducing this tax, given the demonstrable benefits it provides.”
He highlighted a 2009 report by an economist with the Federal Reserve that the “burden of the corporate income tax is borne in large part by labor within the state in the form of lower wages.”
“Reducing this tax even more quickly than currently planned will be the difference between jobs coming to our local communities or jobs going to other states or countries,” Hutchinson said.