New Tax Law Designed to Make City and State More Competitive
Philadelphia-February 2, 2011-Senator Anthony Hardy Williams (D-Phila./Delaware County) and Philadelphia City Councilman Bill Green (D-At-Large) are proposing to eliminate the unpopular and business-repelling corporate net income tax and replace it with a more business-friendly tax to be called the Commercial Activity Tax. This revenue-neutral reform would implement a broad based, low-rate tax on receipts to be paid by all firms selling into Pennsylvania markets, thus reducing the tax burden on Pennsylvania businesses. The Commercial Activity Tax will also result in the elimination of the “profitability penalty” and the market-distorting effects inherent in the corporate net income tax. The ultimate goal of the Commercial Activity Tax is to help make the city and state more competitive in retaining and attracting businesses, thereby creating jobs.
“The Commercial Activity Tax is the first step in making our state and city more business friendly. It will be a powerful tool in our effort to encourage businesses to choose Pennsylvania first,” said Williams.
Green remarked, “As the nation emerges from the recession, as companies prepare to make new investments, and as inter-state competition for employers and jobs heats up, now is the perfect moment for Pennsylvania to send a clear message that it is ‘open for business.’ I commend Sen. Williams for leading this effort.”
In addition to assisting in business retention and attraction efforts, the CAT will result in a broader tax base, tax consumption rather than investment, and encourage capital investment and job creation. The CAT also will help Pennsylvania-based companies when they are competing with companies that are based in-state and out-of-state. Finally, the CAT provides increased revenue stability, facilitates responsible fiscal planning, and creates a simplified and more efficient business tax structure – all of which are important to any business.
A similar commercial activity tax has been effective in Ohio, which is winning awards for business attraction, capital investment, and job creation, and has been proposed in California. Williams will introduce the Commercial Activity Tax legislation soon.
Williams and Green will speak more about the proposed Commercial Activity Tax at a City Hall press conference Thursday, February 3rd beginning at 9 a.m.
For more information about Senator Anthony Hardy Williams, please visit www.senatoranthonyhwilliams.com