Pa. business tax climate not half bad

Adding fuel to the fire over the competitiveness of Pennsylvania's business tax climate, the Tax Foundation issued its annual rankings plunking the Keystone State at No. 26 among the 50 states.

So is the glass half-full or half-empty?

Gov. Rendell took to the podium Wednesday as an optimist. After all, most of Pennsylvania's neighbors had business tax climates that ranked much lower on the Tax Foundation's scale. Here's a link to the report.

New York, New Jersey, Maryland and Ohio were ranked among the Tax Foundation's 10 worst states for business taxes. Dead last was New York. New Jersey placed No. 48 after California.

Besides, Rendell said, the study is based on statutory tax rates and very few businesses really pay that.

The nonprofit, nonpartisan research group said in its report that "state lawmakers are always mindful of their states' business tax climates but they are often tempted to lure business with lucrative tax incentives and subsidies instead of broad-based tax reform."

Rendell said he's been doing just that, having cut the capital stock and franchise tax rates and lifted the cap on net operating losses.

He did mention Pennsylvania's tiny neighbor to the south, Delaware, the home of tax-free shopping, which ranked at No. 8 on the Tax Foundation's index.

The nation's best business tax climate? South Dakota, which has no corporate or individual income tax.