Sunday, May 3, 2015

Corbett ad accuses Wolf of biz tax avoidance

In his toughest attack ad yet, Gov. Tom Corbett (R) accuses Democrat Tom Wolf of using the 'Delaware Loophole' to avoid Pa. business taxes. Wolf's company says it's not true.

Corbett ad accuses Wolf of biz tax avoidance

A new attack ad from Gov. Tom Corbett (R) accuses Democratic opponent Tom Wolf of hypocrisy because, it says, his building-products company takes advantage of a loophole to avoid corporate taxes while he favors more taxes on the middle class.

One problem: the Wolf Organization, though it is chartered in Delaware, says it pays corporate taxes in Pennsylvania and the 27 other states where it does business. State law allows many corporations to avoid Pennsylvania tax by listing assets in Delaware, the so-called “Delaware Loophole.”

The 30-second ad’s other charges rest on Wolf’s service as state revenue secretary in the administration of Gov. Ed Rendell (D).

“When Tom Wolf was the state’s top tax collector, he tried to raise taxes on almost everything,” a woman says in the first frame, going on to note that Wolf called for new taxes on garbage, home heating oil and electricity and “even tried increasing the state sales tax.”

As revenue secretary, Wolf did not set tax policy. In 2007, Rendell proposed the above tax changes – and Wolf testified on their behalf before the legislature – but they were never enacted.

“If there was a hypocrite tax, Tom Wolf would owe a lot of money,” the ad concludes. It says he wants to increase the income tax on some Pennsylvania workers.

Wolf campaign spokeswoman Beth Melena said Corbett “is spending millions in attacks that have already been called false and ridiculously misleading” by media fact-checkers in order to distract voters from his “three years of failed leadership.”

The new attack began running on television statewide Tuesday night. Corbett, trailing by more than 20 points, faces a strategic imperative to try to bring Wolf back to earth before the fall.

Would Wolf as governor push for a higher income tax?

During the Democratic primary, Wolf did call at several forums and debates to make the state’s income tax progressive, or relative to income. (It is currently at a 3.07-percent flat rate, with no personal exemptions, regardless of income). Pennsylvania’s constitution requires “uniformity” in taxation, so moving to a graduated income tax would require a constitutional amendment – or the use of personal exemptions.

Wolf says his idea is to increase the personal income tax liability on wealthier Pennsylvanians and decrease it for middle-and-lower income households. His proposal would exclude from taxation every household's income below a certain amount, what he calls a “universal exemption,” and an as-yet-unspecified flat tax rate would be applied to income above that line. That, he says, would satisfy the uniformity requirement.

The candidate has not spelled out the exemption or the rate he would propose, so it is not possible to assess how his program would apply to specific tax situations.

“I’m still working out the mathematics,” Wolf said at a Pittsburgh campaign stop Tuesday, according to the Pittsburgh Post-Gazette.

 

Inquirer Politics Writer
About this blog

Inquirer staff writer Thomas Fitzgerald blogs about national politics.

Reach Thomas at tfitzgerald@phillynews.com.

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