Panel pushes for lower business taxes

[Freddie Stubbs]

The Associated Press


HARRISBURG - A business tax reform commission appointed by Gov. Ed Rendell and lawmakers on Monday recommended lowering the state's corporate net income tax from 9.99 percent to as low as 6 percent.

If businesses were to see that the state had lowered its corporate net income tax, or CNI, to 6 percent, that would be a significant selling point for Pennsylvania as a place for firms to relocate, said Secretary of Revenue Gregory C. Fajt, the commission's chairman.

But because the commission's recommendations must be "revenue-neutral," the state would have to find ways to replace the lost revenue. That would require closing loopholes in the corporate net income tax and eliminating some tax credits and economic development programs that may not be necessary as a result of a lower tax, the report said.

Jim Welty, a lobbyist for the Pennsylvania Chamber of Business and Industry, said the proposal was nothing more than "tax-shifting."

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