When the Wolf administration approved a law that gradually reduced the state corporate tax rate from 9.99% to 4.99%, the only result was a decrease in the amount businesses had to pay in taxes.
This action did not lead to an increase in the amount of products sold or the profits made by these businesses.
In order to boost sales, it is important to provide consumers, who are mostly ordinary working people rather than the wealthy, with more money to spend on goods and services. Without working-class consumers, major retailers like Walmart would not be able to stay in business.
Pennsylvania can provide consumers with more funds to spend using two methods. The first option is to lower or remove the 6% state sales tax. The second option involves replacing the 3.07% flat-rate state personal income tax with a graduated-income tax that is based on individuals' ability to pay.
Implementing both of these measures would put more money in the pockets of consumers of goods and services, thereby increasing sales and profits for businesses, and boosting tax revenue for the state. This would eliminate the need to raise the state corporate income tax rate.
While it's true that the state reduced the wrong tax, there is still an opportunity for Pennsylvania to update its tax system and surpass neighboring states in terms of modernization.
David L. Faust
Selinsgrove
