CNI Reduction

Introduction | Summary | Research | News | Feedback

Introduction


The iconic “American Dream” paints a picture where hard work = success and a comfortable lifestyle. But with historic inflation, increased government intervention, high taxes, endless bureaucratic red tape, and other government-inflicted barriers, the American Dream is becoming out of reach for many Pennsylvanians.

Pennsylvania has become reactive rather than proactive in laying out a vision that will clear the way for our residents to achieve earned success, upward economic mobility, and the comfortable lifestyle promised by the American Dream. This has resulted in a stagnant economy with stagnant worker wages, and it’s left us in a precarious situation where we must either adapt and overcome or be left behind in the global economy.

We must plan instead of react, we must be competitive instead of regressive, and we must have a vision for the future that will allow Pennsylvanians to truly live out the American Dream.

Learn more below about my proposal to build a stronger Pennsylvania where entrepreneurship, innovation, and economic opportunity can thrive.

Summary

To attract new employers and promote economic growth in the Commonwealth, I have proposed Senate Bill 771 which would gradually reduce the state’s CNI tax rate to attract new employers and promote economic growth in the Commonwealth.

Senate Bill 771 would incrementally reduce the CNI tax from its current rate of 9.99% to 6.99% by 2024. The rate could then be further reduced only if it meets or exceeds the revenue projections for 2024 at the 9.99% rate.

This performance-based mechanism is unique from other proposals because it only reduces the CNI tax to its lowest rate if the economic success of lowering it can be shown through revenue projections. In other words, the benefits must equal or outweigh the costs of cutting the tax, or else the tax will not be further cut.

Lowering the CNI tax rate would make Pennsylvania attractive to businesses and families when compared to other states. New York’s and West Virginia’s CNI is 6.5%, and Virginia’s CNI is 6%. Currently, only New Jersey has a higher rate than Pennsylvania.

Research shows that, in addition to creating better job opportunities and a more favorable business climate, lowering a state’s CNI tax rate:

  • Increases population by incentivizing more people to move here,
  • Elevates home values in local communities,
  • Raises workers’ wages, and
  • Does so without negatively impacting state revenue.
                                           Increases Population                                         

                                 Elevates Home Values                                 

Raises Wages 

State Revenue Impacts

It is my hope that making Pennsylvania more economically competitive by lowering our CNI rate will benefit working class families, reverse our stagnant population growth, and ensure that Pennsylvania is an attractive place to live, work, and raise a family for generations to come.

Learn more about my bill to increase economic opportunity for all Pennsylvania residents here.

Research

Lowering Pennsylvania’s Corporate Net Income (CNI) tax rate would have a ripple effect across the Commonwealth’s economy, benefitting small businesses, working class families, and communities alike. Research shows that lowering a state’s CNI tax rate:

  • Increases population by incentivizing more people to move here,
  • Creates better job opportunities and more favorable business climates,
  • Elevates home values in local communities, and
  • Raises workers’ wages.

Not only does the data show a strong connection between lower CNI rates and higher population, home values, and workers’ wages, but these goals are able to be achieved without impacting general fund revenue or raising taxes on Pennsylvanians.

You can view a report with original regression analyses specific to Pennsylvania and a literature review of existing research on the benefits of lowering a state’s CNI tax here.

News

Feedback

In May 2021, I published an economic growth survey question in my e-newsletter and on my social media accounts and asked constituents to respond:

 

In January 2022, I published another economic growth survey question in my e-newsletter and on my social media accounts and asked constituents to respond:

 

Here are some comments fellow constituents have sent me regarding economic growth and reducing PA’s CNI tax:

“You can’t attract new businesses without having the workforce available to support the businesses. You attract the workforce by ensuring fair wages, adequate healthcare, providing safe communities with good public education.” – Michael from Landisville, PA

“Focus on jobs, economy and healthcare.” – Josh from Lancaster, PA

“Law makers should be working on big picture items. Reducing our state tax burden for residents and businesses will help us to be more competitive with other states and therefore allow us to attract more businesses to the state as well as new residents as a potential workforce for those companies.” – Jeffrey from Stevens, PA

“Secure the economic growth of the state.” – Scott from Elizabethtown, PA

“I strongly support your initiative for reducing our Corporate Tax rate. I also continue to notice that Ohio is getting investment, and PA is not. I was on a team that was researching new plant locations (we had many in PA), and although we would have liked to expand here, it was clearly not business friendly. (Income Tax, Workers Comp, Unemployment) etc. PA is not competitive with Ohio for manufacturing jobs.” – Jeffrey from Ephrata, PA

“As a business owner I am worried about inflation, job creation and property taxes. I love PA but as My companies grow, I can see why businesses leave PA for other business friendly states.” – John from Lititz, PA

Here are some stakeholder support letters I’ve received:

Greater Pittsburgh Chamber of Commerce

CompetePA

Joint Op-Ed from the African American Chamber of Commerce of Western Pennsylvania, the Asian American Chamber of Commerce, Pittsburgh, & the Pittsburgh Metropolitan Area Hispanic Chamber of Commerce – Viewpoint: Tax Reform to Create Jobs, Boost Communities

Join the discussion!

To effectively increase economic opportunity for all Pennsylvania residents, I will need the continued engagement of my constituents and local leaders, as an ongoing dialogue between lawmakers and those they represent is absolutely critical to succeed.

As such, please fill out my Voice Your Concerns Form with any further questions, thoughts, or concerns you may have. I firmly believe that an open and productive conversation is necessary as we seek to build a stronger Pennsylvania, together.

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