At a hearing this week held by the Pennsylvania House Majority Policy Committee, lawmakers and experts discussed the need to make significant changes to tax and regulatory policies to drive down inflation and grow the economy.
“Federal policies are largely to blame for historic inflation, but there are plenty of things we can do to lessen the impact on our families and employers here in Pennsylvania and to strengthen our economy for the long term,” State Rep. Martin Causer (R-Cameron/McKean/Potter), chairman of the committee, said. “While some in state government prefer to do nothing but blame inflation on ‘corporate greed,’ we are looking for real solutions to help today and well into our future.”
Among some of the suggested fixes was lowering the 9.99 percent Corporate Net Income Tax, which is the second-highest in the nation; increasing the amount of operating losses that may be credited toward tax liabilities; reforming taxes impacting small businesses; addressing regulatory roadblocks, including tort reform, occupational licensing restrictions, civil liability reforms, partisan judicial elections and the state liquor monopoly; increasing domestic energy production; and expanding the labor force by improving education and workforce development training.
Alex Halper, director of government affairs for the Pennsylvania Chamber of Business and Industry, said structural tax reforms will help the state’s economy respond to inflation.
“For both small businesses and larger corporations, lowering employer tax burdens can bolster economic growth, increase wages and create family-sustaining jobs. It allows for greater reinvestment in equipment, production, materials, and people; in other words, increasing supply and easing inflation,” Halper said.
Several speakers voiced opposition to Gov. Tom Wolf’s proposal to send $2,000 checks to most Pennsylvania taxpayers.
“Payments of that type will only make the inflation problem worse, as inflation is fed by too many dollars chasing too few goods,” David Taylor, president and CEO of the Pennsylvania Manufacturers’ Association, said.
Taylor also stressed the importance of the government helping workers gain the skills needed to fill the thousands of manufacturing jobs that are open.
“Building out the workforce and helping people achieve employment would lessen the inflationary pressures that are worsened by our current labor shortage,” Taylor said.
Further, Taylor emphasized the need for domestic energy production and withdrawing Pennsylvania from the Regional Greenhouse Gas Initiative (RGGI).
“Wolf’s longstanding threat to impose a new, additional tax on natural gas production has rendered our investment environment uncertain, which has discouraged new investment. Pennsylvania needs to adopt a pro-growth, pro-production, pro-deployment agenda for domestic energy that will benefit employers, workers, and consumers,” Taylor said.