Would raise gasoline tax, PennDOT fees, and create new oil company profits tax
SEPTEMBER 14, 2010 | by ERIC BOEHM
House Democrats have crafted an alternative transportation funding plan which includes a new eight percent gross profits tax on oil companies, an increase to the state’s gasoline taxes, and increases Department of Transportation (PennDOT) fees.
The plan, leaked to PAIndependent.com on Tuesday, would generate $1.286 billion annually beginning in fiscal year 2011-12. $501 million would be spent on mass transit while $785 million would be available for highway funding.
A plan put forth by Gov. Ed Rendell last month contained many of the same components but would have raised only $1 billion for transportation, with $300 million earmarked for public transit funding.
The governor’s proposal estimated $576 million could be generated from a eight percent tax on the gross profits of oil companies, but the House Democrats’ proposal aims for a more conservative $442 million. In either case, the new tax on oil companies would replace of the 9.99 percent corporate net income tax which the companies are currently liable for.
Most of the new revenue from the tax would be directed for transportation funding, but 7.3 percent would go to the General Fund to compensate for the loss of corporate net income tax payments from oil companies. Mass transit would receive 80 percent of the remaining revenue from the tax after the General Fund portion was taken out.
In the Democrats’ plan the oil company franchise tax, a component of the gasoline tax paid by the state’s drivers, would rise by 6.5 cents per gallon and would be tied to inflation in future years. Click here to read more.
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