FOR IMMEDIATE RELEASE 6.26.26
CONTACT: Kirstin Snow, Communications Director, snow@pennpolicy.org
Drawing on newly released research on Pennsylvania’s corporate tax system and minimum wage, the Pennsylvania Policy Center argues that lasting affordability requires growing incomes and modernizing the tax code—not temporary tax holidays and cuts that leave fewer resources for public investment.
Harrisburg, PA— Following the Pennsylvania Senate’s passage of a tax package on June 26 and alongside the release of two new policy briefs examining Pennsylvania’s corporate tax system and minimum wage, Pennsylvania Policy Center Executive Director Felicity Williams, Esq., issued the following statement.
Related Resources:
- New Report: Pennsylvania’s Corporate Tax Changes Now Cost the Commonwealth an Estimated $2.21–$2.99 Billion Each Year
“Some provisions in the Senate’s tax package move Pennsylvania in the right direction. Repealing the sales tax exemption for computer data center equipment is a positive step toward a more responsible tax code, and reducing electricity costs for consumers would provide welcome relief for many households.
But taken as a whole, the package falls short of what Pennsylvania needs.
While some of the proposed tax changes may reduce the cost of certain purchases or lower some household expenses, they do not address the underlying causes of Pennsylvania’s affordability crisis. Temporary relief at the cash register or on a monthly utility bill cannot make housing more affordable, reduce child care costs, ensure families can afford health care, or raise wages. And broad tax cuts that reduce recurring state revenues leave fewer resources available to make the long-term investments that strengthen our communities and expand opportunity.
Pennsylvanians deserve real, lasting solutions to the affordability crisis, not temporary tax holidays that create the appearance of relief today while making it even harder to balance the budget and make the investments families depend on tomorrow.
The Commonwealth was already facing an estimated $6.4 billion structural budget gap this year. At a time when federal decisions are shifting additional costs and fiscal responsibilities onto states, reducing recurring revenues even further without a sustainable replacement plan only makes the budget math harder, increases pressure on this year’s budget negotiations, and raises the likelihood of difficult tradeoffs affecting the public investments Pennsylvanians rely on.
The repeal of the sales tax exemption for computer data center equipment was one of the strongest provisions in the package. As the Pennsylvania Policy Center recently documented, this rapidly growing tax expenditure is projected to cost the Commonwealth nearly $188 million this fiscal year and more than $500 million annually within a few years, yet policymakers have never clearly established what Pennsylvanians receive in return in terms of jobs, accountability, or community benefits.
Unfortunately, those positive provisions cannot offset a package that would reduce state revenues by far more than it restores. I am particularly disappointed that, once again, the Senate chose to table combined reporting.
Today, the Pennsylvania Policy Center released new research finding that after more than two decades of corporate tax cuts, tax base erosion, and profit-shifting opportunities, Pennsylvania now collects an estimated $2.21 billion to $2.99 billion less each year in Corporate Net Income Tax revenue than it would have if it had maintained its historical relationship to national corporate tax collections. The report also challenges one of the most persistent myths in tax policy: that lower corporate taxes automatically produce stronger economic growth. The evidence simply does not support that conclusion.
Combined reporting is a well-established policy already adopted by 28 states and the District of Columbia. It helps ensure that large multi-state and multinational corporations pay taxes based on where they actually do business, not where profits can most easily be shifted on paper.
This debate comes during Revenue First Week of Action, a national effort highlighting a simple reality: strong communities, thriving economies, and a growing economy all depend on sustainable public revenue. For Pennsylvania, that means modernizing our tax code, closing costly corporate loopholes, and ensuring our revenue system generates the resources needed to meet the Commonwealth’s needs, not continuing to shrink the resources available to invest in our future.
The Senate devoted significant time to debating tax proposals in the name of affordability, yet legislation to raise Pennsylvania’s minimum wage remains stalled. If lawmakers are serious about helping working families keep up with rising costs, increasing wages should be central to the conversation. Affordability is not just about what families pay in taxes; it’s also about what they earn. As our new brief, $15 is the Floor, shows, more than one million Pennsylvania workers earn between $7.25 and $15 per hour, and raising the minimum wage to $15 would increase annual wages by an estimated $5.1 billion statewide. That means more money in workers’ pockets every payday, a far more meaningful step toward affordability than temporary tax holidays that disappear while the bills keep coming.
Pennsylvania does not have a spending problem; it has a revenue problem. We cannot cut our way to affordability. We have to build our way by growing incomes, modernizing our tax code, closing costly corporate loopholes, and making the public investments that strengthen our economy and expand opportunity.
As budget negotiations continue, we urge lawmakers to move beyond temporary fixes and pursue the structural reforms necessary to build a stronger, more sustainable Commonwealth for everyone.”
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