HARRISBURG – A former businessman, Gov. Tom Wolf has used his time in office to put the commonwealth on a path to strong fiscal ground.
With Pennsylvania’s finances now in order, Wolf on Wednesday highlighted his plan — backed by legislation sponsored by state Senator Steve Santarsiero and Representative Mary Jo Daley — to pave the way for new business opportunities, good jobs and a stronger economy by reducing and modernizing the commonwealth’s Corporate Net Income Tax (CNIT).
“In Pennsylvania, our Corporate Net Income Tax is one of the highest in the nation and it’s holding our commonwealth back,” Wolf said. “Businesses are asked to pay more than their fair share, it’s a barrier to new business growth, and limiting opportunities for our workers and new student graduates.
“My plan to lower this tax on Pennsylvania’s businesses is an opportunity to support Pennsylvania’s businesses and families, to ensure that students can find good jobs, and to remove barriers to new business and innovation in the commonwealth.”
Over the past seven years, the Wolf Administration has turned a $2-3 billion structural budget deficit into a $2-3 billion budget surplus and built a “Rainy Day Fund” to more than $2.8 billion — more than 12,000 times what it was when he took office.
Wolf will be the first governor since Dick Thornburgh, who left office in 1987, to turn over a budget surplus to his successor. Now, Wolf wants to reduce the CNIT from 9.99% to 7.99% on Jan. 1, 2023, with a reduction to 6.99% in tax year 2026 on a path to 4.99%. His plan would also modernize the current structure to level the playing field for all businesses.
Combined, this lower tax rate and modernization will immediately make the commonwealth more competitive with surrounding states and improve the overall business climate. By improving the competitiveness of Pennsylvania’s business climate, Wolf is welcoming businesses to take root here or expand their current operations — both of which would lead to new, good paying jobs for Pennsylvanians.
“It is past time we level the playing field for our Pennsylvania-based businesses,” Santarsiero said. “Fiscally, the commonwealth is in a position right now to improve our corporate tax system and set the stage for a more vibrant economy. The changes we are proposing today will support our local businesses and incentivize new start-ups in Pennsylvania.”
“Next year, when the CNIT is cut to 7.99%, over 95% of corporations will be held harmless or will get a tax cut. That leaves only 5% of corporations that will have a higher tax bill and that would be the corporate taxpayers who do business inside and outside of Pennsylvania,” Daley said.
Santarsiero and Daley are sponsoring legislation to support the governor’s plan with Senate Bill 1077 and House Bill 2510. With enough support to pass, these bills will positively impact tens of thousands of businesses in the commonwealth and pave the way for immense new business opportunities.
“Lowering the rate will allow Pennsylvania-based companies like Buchart Horn to invest in our employees, invest in growth and reinvest in the communities where we operate,” said Buchart Horn CEO Brian Funkhouser. “We all have a fundamental responsibility to find the best way of ensuring future generations have even better job opportunities.”