NFIB members testify at a legislative forum in York
Two NFIB members testified during a legislative forum recently on the impacts of the federal tax cuts on Pennsylvania. The objective was to determine the impact of those cuts on Pennsylvania businesses and what can be done by state lawmakers to make the Commonwealth more business-friendly. John Bailey, of Bailey Coach, told lawmakers that in the past 20 months, his company was able to purchase over $1-million of new equipment and $350,000 in used equipment. He credited the tax cuts and a strong economy for making the purchases possible. Because his company believes that the economy will remain strong, Bailey Coach is planning to purchase a 13,000 square foot building in Jackson Township in October. His company plans to renovate and expand the building to provide a better working environment for his staff and create a more efficient experience for his customers. He credits the tax cuts and the economy with giving him the confidence to make such a significant investment.
The Chief Financial Officer of Motor Technology, Inc, Tom Ryan, testified to lawmakers that the Federal Tax Cuts and Jobs Act has resulted in increased hiring and higher take-home pay for his employees. Ryan also explained that his company relies on new technology such as electronic sensors. The new technology not only costs more money, but it also requires significant capital investment in workforce training and hiring. In Ryan’s view, these new investments in equipment and human capital are a direct result of the tax cuts.
There was testimony from a North Carolina House Finance Committee Chairman, who explained how that state was able to lower taxes and encourage economic growth. Lawmakers there accomplished certain tax reforms including reducing the tax burden, closing loopholes, eliminating most credits, exemptions, and deductions that were available to only a few taxpayers. They also broadened the tax base and lowered rates, encouraging economic growth gradually. These changes resulted in North Carolina being ranked by Forbes as the Best State for Business in 2017 and being among the top five states for wage growth.
The main takeaway from the hearing was that federal tax reform has resulted in higher wages and capital investment. A significant portion of the financial gains from the tax cuts will be injected into Pennsylvania’s economy. According to Nathan Benefield of the Commonwealth Foundation, the economic growth and increased jobs will increase state tax revenue. Benefield argued Pennsylvania should follow suit with state-level tax reform. All who testified urged lawmakers to enact meaningful tax reform to help make Pennsylvania more business-friendly.
Carl Marrara of the PA Manufacturers’ Association testified that there should be a legislative review of Pennsylvania Department of Revenue rulemaking. Many at the hearing believed that Pennsylvania needs to become more competitive by making the Commonwealth a more attractive place to open or relocate a business. NFIB hopes legislators make the changes necessary to improve the economic environment in Pennsylvania.