There have been plenty of tax cuts over the years occurring in order to benefit the state of Pennsylvania. Of course, the biggest advantage that has been made includes the Republican-majority state House on Tuesday, as does the final deal created in the final months.
Lawmakers are voting for the economy’s sake. It’s all for a bill that could potentially reduce the corporate net income rate right from 10% to 9%. Meanwhile, the sufficient rate for the state’s revenues would be going down to 8% by 2025. The measure, potentially entering a law, would cost around $128 million around 2022 to 2023. It’s likely that this wouldn’t quite cover an entire 12-month period, but still, it’s a scenario that would whittle down the state revenues by about $400 million to $450 million on an annual basis, as projected by House Republicans. This could make a big difference.
Josh Kail, the lead sponsor of the bill, is a Beaver County Republican Representative. And he himself has called it “a measured approach that rewards growth and also allows us to have more cuts without further legislation.”
The bill has an overwhelming amount of attention as approved by the House. This is indicated by a recent vote of 195 to 8. If the bill gets passed, then it could represent the next steps to take future corporate net income tax cuts. These cuts being wholly dependent on state budget surpluses with a minimum of $500 million.
It’s not the most surprising development. After all, Pennsylvania state revenues continue to get stronger in the fiscal year. Most recently, the Revenue Department is showing the year-to-date fund collections to be about $2.7 billion, while 8% shoots projections through March. The surplus for the month of April is expected to hit $1.5 billion, which will be finalized in the coming days.
Regarding the future of other tax cuts, there’s much left to do.
Napoleon Nelson, a representative for the Democrats, has been supportive of the likelihood for even larger tax cuts to come in the future. This would go along with so many other changes coming in to allow for tax revenue. Specifically for companies accomplishing more business in multiple states.
Nelson himself believes that there’s areas for progress. “There’s so much more that we can do, if we actually allow the agreement to happen. Let’s actually provide businesses with what they need so that they can come to Pennsylvania.”
Since 1995, the corporate net income tax rate has stagnated at 9.99%
Republican majority spokesperson Erica Clayton Wright knows about the bill being sent to the state Senate. And still says a corporate net income tax cut uses bipartisan support “and uses a component of the overall strategy” for Pennsylvania’s economy. The House-passed bill “will be part of those discussions” with the House.
Of course, the magnitude of state tax cuts is relatively limited, in a condition of Pennsylvania utilizing federal coronavirus recovery funds as they go on and on, in this post-pandemic age.