HARRISBURG – The PA Chamber of Business and Industry, The Chamber of Commerce for Greater Philadelphia, and The Greater Pittsburgh Chamber of Commerce, an affiliate of the Allegheny Conference, today applauded Gov. Tom Wolf’s call to reduce the state’s Corporate Net Income Tax rate, our organizations’ top policy priority. The business community has long advocated for such a reduction to improve the state’s overall competitiveness.
Few issues draw as much attention as a state’s tax climate for companies seeking to locate or expand operations. At 9.99 percent, Pennsylvania has the unfortunate distinction of having the country’s second-highest Corporate Net Income tax. The state’s disproportionately high CNI serves as a major red flag to potential investors and puts the Commonwealth at a distinct disadvantage as businesses look to other pro-growth states to open or expand operations.
While a reduction to the CNI rate has been long overdue, the chamber leaders express concern with the proposal’s subjective expansion of the state’s taxing authority, citing the need for clear, predictable standards for employers to follow.
“Pennsylvania continues to lose new business prospects and our best and brightest to other states,” said PA Chamber President and CEO Gene Barr. “Our excessively high CNI rate puts the state at a competitive disadvantage when it comes to attracting and retaining jobs and impedes investment and economic growth. The governor’s proposal to reduce state’s CNI is a positive step to improving the Commonwealth’s overall business climate and will help to ‘Propel PA Forward.’ As the budget process moves forward, we encourage lawmakers to keep a reduction in the CNI rate that has clear and concise parameters for the state and businesses to follow, at the forefront of negotiations.”
Matt Smith, president of the Greater Pittsburgh Chamber of Commerce, reinforced that “as regions look to recover and thrive in a post-pandemic world, we need, now more than ever, to ensure that the Commonwealth is competitively positioned to retain and recruit the businesses and talent needed to prosper. Through a meaningful reduction of Pennsylvania’s CNI rate, there is an opportunity to harness the Commonwealth’s fullest potential by making it more attractive to business investment, creating good-paying jobs, and contributing to the community vibrancy and opportunity that are essential to fueling talent attraction and growing our population.”
“High corporate net income taxes slows employment growth, reduces wages, and is a barrier to attracting new enterprises,” said Rob Wonderling, president and CEO of the Chamber of Commerce for Greater Philadelphia. “We applaud Governor Wolf for recommending a substantive reduction in the CNI and look forward to working with his administration and our legislative leaders in Harrisburg on passing real and meaningful tax reform legislation this session.”
As the 2022 budget process begins in earnest, the three chambers urge lawmakers to include this much-needed reduction in the CNI rate and prioritize policies that will promote economic growth.