01/10/2008
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NFIB member Ron Sniegocki (right) testifies before the House Republican Policy Committee as NFIB/Pennsylvania State Director Kevin Shivers looks on. Photo used with permission from House GOP Communications |
With state tax revenues running ahead of official projections, a group of powerful state lawmakers in Harrisburg are leading the call to reduce tax rates to return some of the surplus to taxpayers.
State Senate President Pro Tempore Joe Scarnati (Jefferson) says a cut in the personal income tax rate is a priority for him. He was joined by House GOP policy chairman, state Rep, Mike Turzai (Allegheny) who is advocating a plan in the state House to repeal the 2003 personal income tax increase. The PIT was raised 10 percent in 2003 to 3.07 percent.
NFIB member Ron Sniegocki of Palmyra, Lebanon County, urged a state House panel to roll-back the state personal income tax rate to the pre-2003 rate of 2.8 percent.
"I can speak with conviction when I say that by doing so you will be returning money to the small business engines of the Pennsylvania economy," Sniegocki told members of the House Republican Policy Committee on Wednesday. "You can be assured the money will be used by this group to help grow their businesses -- to buy that piece of equipment needed to attract those new sales; or to hire that extra worker it currently cannot afford."
A certified public accountant, Sniegocki runs several accounting and financial services firms and other businesses. He has spent more than 25 years in the tax & financial field helping small-business people with the myriad regulations and taxes imposed by all levels of government.
He noted recent federal tax cuts further illustrate the direct relationship between reducing the tax burden and expanding the economy. "This lesson cannot be better applied than on Pennsylvania's small businesses," he continued.
But Sniegocki also observed that while small firms lead the way in employment and job creation, in many ways small-businesses are treated unfairly compared to large corporations.
"Our small-business job engines are organized primarily in one of three ways for legal and state reporting purposes: sole proprietorships, as partnerships or as small-business corporations best known as Subchapter-S corporations," Sniegocki testified. "All of these entities are directly impacted by the Personal Income Tax, which takes taxes out of theses entities through the owners' earnings and salary."
A recent Commonwealth Foundation study projects a roll-back of the PIT rate to 2.8 percent could yield about 26,000 new jobs and lead to over $200 million in revenue to the state because of higher business profits and more workers resulting from increased economic activity.
House Bill 1092 would reduce the PIT rate to 2.8 percent over two years. HB 1641 would reduce the PIT rate to 2.99 percent.
Sniegocki also recommended lawmakers consider aligning the state tax code with federal laws, such as equipment depreciation rules and "Section 179" expensing limits, to help small business reduce the need for several sets of books; allowing sole proprietorships, partnerships and Subchapter-S corporations to carry-forward losses in similar fashion as C-corporations; and easing the tremendous regulatory and paperwork burden that small businesses face on a daily basis.
Read Sniegocki's full testimonyRead the Commonwealth Foundation Study
