Sen. Ryan Aument: CNI tax reform will bring economic stability, mobility to Pa. | TribLIVE.com

2022-09-24 19:06:21 By : Ms. Linda Yin

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The American dream promises that hard work equals success and a more prosperous future. But with historic inflation rates, intrusive government regulation, high taxes, bureaucratic red tape and other government-inflicted barriers, the American dream feels increasingly out of reach for millions of people. That’s certainly the case in Pennsylvania, which has a corporate net income tax rate second only to New Jersey and consistently ranks among the worst states for business.

Recently, however, the state Senate approved a proposal, Senate Bill 771, that would gradually reduce the state’s corporate net income (CNI) tax from its current rate of 9.99% to 6.99% by 2024. This reform would help attract new employers and promote economic growth. Under the bill, the rate could be even further reduced, but only if 2024 revenue projections meet or exceed those with the 9.99% rate.

Based on data from the U.S. Census, research shows that lower corporate income tax rates are associated with higher rates of population growth. Interstate migration trends show that more people move to states with lower CNI rates than to states with higher ones, supporting the argument that states with lower CNI rates have more favorable business climates and better job opportunities.

Given our state’s loss of a representative in Congress after the 2020 Census showed stagnant population growth, we need to take advantage of this opportunity to attract new residents.

Lowering a state’s CNI rate is also associated with rising home values. For the period between 2010 and 2020, a recent analysis shows that the 23 states with the lowest CNI rates saw significant growth in typical home values compared to the 23 states with the highest CNI rates.

Perhaps the most compelling argument for lowering the CNI is the benefit that it would provide to Pennsylvania working-class families. Decades of research demonstrate a direct correlation between lower CNI rates and higher wages.

Despite all the data showing the benefits of a competitive CNI rate, opponents usually claim that cutting these levies would reduce state revenue, negatively affecting many vital state programs funded through the collection of CNI taxes.

The truth: States with the lowest CNI rates experienced 10% higher growth in state revenues from 2000 to 2020, compared to those states with higher CNI rates.

In short, the data show a strong connection between lower CNI rates and higher population growth, home values, and workers’ wages — and these benefits are achieved without affecting general fund revenue or raising taxes on residents.

Beaten down by inflation and the rising costs of necessities like food and gas, Pennsylvania taxpayers need some good news. We can help bring opportunity and the promise of economic prosperity back to our Commonwealth. I am confident that making Pennsylvania more economically competitive by lowering our CNI tax rate will benefit working-class families, reverse our stagnant population growth, and ensure that Pennsylvania is a more attractive place to live, work and raise a family.

State Sen. Ryan Aument is serving his second term representing the 36th District in Northern Lancaster County.

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