Employers in Pennsylvania might be allowed to pocket your state income tax

A bill moving through the Pennsylvania Legislature would allow employers to keep state income tax money they withhold from newly hired employees, the Associated Press reported Wednesday.

The state Senate approved the bill, 33-16 on Wednesday. It is headed back to the House, which approved a more expansive version earlier this week. Corbett’s office says he has not decided whether to sign the measure, which was introduced just six weeks ago.

Supporters say it would spur the Pennsylvania economy, acting as an incentive for businesses to stay in the state. But opponents say it’ll create more tax loopholes for businesses. The amount of diverted tax money would be capped at $5 million annually and the incentive ends in 2018.

Some businesses or organizations would not qualify, including governments, schools, the gambling industry, churches, retailers, utilities and eateries, as well as those that are delinquent on taxes.

What do you think? Does this sound like an incentive that would keep small businesses in the state? (Sidenote: According to Good Jobs First, a national policy resource center, big businesses get to take part, too.) Or will this take too much money from schools, roads and police that we need?

This entry was posted in Economic Outlook, Jobs, Stephanie Reighart, Taxes and tagged , . Bookmark the permalink.

2 Responses to Employers in Pennsylvania might be allowed to pocket your state income tax

  1. John says:

    When the incentive is to hire new employees, what unintended incentives will this produce? Will companies also give lower raises, have more part time employees, have fewer full time employees, lay off more, and/or less investment in their business? When the incentive was to invest in their business, companies hired fewer people.

  2. Rance Hulshart says:

    Will this encourage employers to find a reason to let current workers go to save on wage and vacation time and at the same time receive this benefit?

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