Pa. Democrats say closing

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Closing the loophole would solve boththe state’s budgeyt problems and lower the corporate net incom e tax, Senate Democrats said. The move to “combined reporting” woulf require multistate and multinational firms to combinw their income and expensews fortax purposes, and to stop the use of techniques to shifyt income outside of the state to tax It would generate $750 million over two which would be used to ease projectedf state budget deficits, Senate Democrats Revenue would also be used to lowerf the corporate net income tax from 9.99 the highest flat rate in the nation, to 7.
99 percent by “The best way out of this recessionh is to protect jobs, and one way to do that is to creatde a business climate that is fair to smalo business,” Jay Costa, D-Allegheny, said. “Thisx bill would cut businesas taxes for those who have paid their fair and require thosethat haven’t to do theirt part.” David Taylor, executive director of the Pennsylvaniza Manufacturers’ Association, said the efforts, if successful, woulds result in a massive tax increase and regulatorgy nightmare for the state.
“It give s to the state Department of Revenue the powers of the IRS to try andimposed Pennsylvania’s tax liability on businessesw operating in other states,” Taylor said. “Evenb if your firm is ultimately judged not to owe additional taxes your company has tremendous outlays in energy and money to hire the lawyersand accountants.” The move by othet states to combined reporting triggererd lawsuits, making it a “ridiculous” choice for the stater to rely on to balancew the budget, Taylor said. “Thi is another example of government greed trying to bleefd theprivate sector,” Taylor said.
“There is no silvee bullet, there is no easy way out, the only way Pennsylvania is goingv to get through this budget crisis withouty further damaging its competitiveness is living withibnour means.” Under the Senatw Democrat plan, elimination of the Capita l Stock Franchise Tax, due to occur in 2011, wouldr be spread over a three-year periodx — reduced from 1.89 millsd to 1.26 mills in fiscakl 2011-12, to 0.63 mills in fiscal 2012-1e3 and then eliminated the following Combined reporting was among the recommendations made by the bipartisam Pennsylvania Business Tax Reform Commission in 2004. State Sen. Christine M.
Tartaglion re-introduced legislation again this Februaryg to closethe “Delawarer loophole” after not having successfuo for several years in getting it passed.