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Politics & Government

State Senator Bob Mensch: Cut Taxes To Attract Businesses

Boscola co-sponsors legislation aimed at creating jobs

Editor's note: State Senator Bob Mensch's district includes Salisbury Township.

If State senators Bob Mensch and Lisa Boscola were ranking their legislative priorities for the year, they would look something like this: 1) Jobs 2) Jobs 3) Jobs.

Both Lehigh Valley senators say the most important thing Pennsylvania can do to eliminate its $3 billion-$4 billion budget gap is to spur employment growth, which will put more money in people’s pockets and more in the state coffers.

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To that end, Republican Mensch has introduced five tax bills he says will make Pennsylvania more attractive to businesses, including reducing the rates for the personal income tax and the corporate net income tax. Democrat Boscola has signed on as a co-sponsor.

 “Collectively, Pennsylvania has the most onerous business- corporate tax structure in the world -- not just the nation -- the world,” Mensch said. He was referring to remarks made last June by Joseph Henchman of the conservative Washington, D.C.-based Tax Foundation. Henchman said then: “If Pennsylvania were its own country, it would have the highest overall corporate tax rate in the world at 41.5 percent” if you include federal and state taxes and a state-local deduction. 

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 At 9.99 percent Pennsylvania has the second highest corporate net income tax in the United States, after Iowa. Mensch’s Senate Bill 206 would cut that tax to 8.99 percent this fiscal year, and drop it to 7.99 percent next year and 6.99 percent after that.

 Senate Bill 204 would reduce the personal income tax rate from 3.07 percent to 2.99 percent, which would help individuals and small businesses that don’t pay corporate net income tax, Mensch said. “Anyone with a LLC [limited liability company] or a LLP [limited liability partnership] is paying personal income tax,” he said. 

 Asked if legislation that cuts tax rates might result in less revenue for the state, at least initially, Mensch said he thinks the changes would spur more jobs and revenue quickly. “We do believe that the net effect of this would be positive in the first year,” he said.

 Last summer, Mensch and Boscola created the Economy, Business and Jobs Caucus, which aims to find ways to better attract and retain businesses and bolster job growth.

 “I don’t think there’s anything more important then creating jobs and getting people back to work,” Boscola said in a phone interview Thursday. “We’ve got to reduce some of these taxes to create an investment environment.”

 Boscola acknowledged that companies look at more than a state’s business taxes when they decide where to locate, but it’s a factor.  Attracting more businesses will spur job growth, which will generate revenue needed to pay for state programs and services people depend on, she said.

 Another part of Mensch’s economic package is a bill that gives businesses a tax credit for job training. Without such incentives, companies are more likely to lay off middle-aged and older employees who don’t have the technology skills needed in a high-tech world, he said.

 “The company might say ‘we can get somebody for half the price, someone fresh out of school,’” Mensch said. “This is a way to keep the time-honored employee.”

 The other two bills in the package deal with businesses’ capital investments and sales in and out of state. Mensch said the legislation has “huge support” from the business community.

Mensch represents parts of  Lehigh, Northampton, Bucks and Montgomery counties. Boscola represents parts of Lehigh, Northampton and Monroe counties. 

 

 

 

 

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