Working America member Mary Karscig from Shaler, Pennsylvania, is fed up with the Corbett agenda. Since he arrived in office, Pennsylvania Gov. Tom Corbett has used his post to make deep, painful budget cuts, including a nearly $900 million cut to public education, while leaving loopholes and corporate handouts intact.
In Pennsylvania, 70 percent of corporations pay no income tax thanks in part to the “Delaware tax loophole,” which allows those corporations to set up headquarters in Delaware, which has different tax laws. Oftentimes this headquarters are nothing more than a P.O. box, or a building smaller than a supermarket. The Delaware loophole and other loopholes cost Pennsylvanians $4.4 billion last year.
Mary understands that it isn’t rocket science: why do average Pennsylvanians pay their fair share only to see their school budgets slashed, while companies can legally shirk their responsibility – and with the Governor’s blessing, no less? Her letter to the editor of the Pittsburgh Post-Gazette, “Close the loophole,” is below:
In response to “The Deepest Cut: Left With No Options, the City Schools Pare Teachers” (June 3 editorial): Should Pennsylvania keep the Delaware loophole open despite the sobering costs? Keep the Delaware loophole open and see the economy in Pennsylvania decline further due to hefty cuts to education, health care and social services.
Pennsylvania schools and social services can be helped by collecting taxes from corporations currently sliding by in the Delaware loophole. Although corporations are subject to a corporate net income tax, 71 percent of corporations in Pennsylvania pay no tax to Pennsylvania. Why? Because many corporations establish their “home office” in Delaware, a state whose tax laws require no tax payment to other states. Such home offices often equate to a post office box or file drawer. Is it legal? Yes. Is it fair? No!
These corporations often pay lower taxes than a family making approximately $36,000 a year pays. What will happen when the middle class is wiped out and no tax base exists? We must genuinely close the Delaware loophole now; collect the taxes owed to Pennsylvania; and restore funding to health care, social services and education. This will provide jobs for many people, including people like my son who could not find a job in education and returned to school to earn his master’s degree in education. He is now overwhelmed with student loan debt.
To aid our schools and essential social services and to preserve accompanying jobs, everyone needs to pay his or her fair share, not just the middle class.