Businesses worried about tax proposals

    Pennsylvania’s business community is taking issue with one of Governor Rendell’s tax proposals, saying it will hurt small companies across the commonwealth.

    Pennsylvania’s business community is taking issue with one of Governor Rendell’s tax proposals, saying it will hurt small companies across the commonwealth.

    Listen:
    [audio: 090703sdstock.mp3]

    As a way of helping fill Pennsylvania’s budget gap, Rendell wants to freeze a long-planned reduction in the Capital Stock and Franchise Tax, which is due to expire in 2011.

    This year, companies are paying a 1.89 percent levy on every thousand dollars of assets. The governor wants to retroactively bump that up to 2.89 percent. David Patti, the president and CEO of the Pennsylvania Business Council, has a problem with that.

    Patti: So for firms that have already legally complied with the tax law, and fully paid 100 percent of what they were supposed to pay, we would now be saying, ‘Oh, sorry. We took the tax rate up. You’re going to have to pay more money for the last six months.

    The tax is scheduled to gradually decrease for the next few years, but Rendell wants to keep the rate at 2.89 percent through 2011, and phase it out in 2014. He says the additional revenue will help see Pennsylvania through the current recession.

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