State Sen. Anthony Williams, a Philadelphia Democrat who's received past financial backing from Susquehanna Investment Group boss Jeff Yass and other libertarian-conservatives, has joined  Phila City Councilman Bill Green to unveil a proposal tomorrow for a state Commercial Activity Tax on sales in Pennsylvania.

The new tax would replace the state's corporate income tax, one of the nation's highest (in a state where favored companies and industries are routinely given breaks, making them reliant on politicians.)

The proposed C.A.T. sounds a lot like the enhanced city gross-receipts (sales) tax Green failed to get endorsed by Mayor Nutter and the Chamber of Commerce, who prefer to tax profits, not sales. Green and Williams say sales taxes are easier to collect, and to impose on out-of-state companies, than income taxes. Green has also argued for exempting small businesses from both revenue and income taxes.

Williams and Green call theirs "a broad based, low rate tax on receipts to be paid by all firms selling into Pennsylvania markets, thus reducing the tax burden on Pennsylvania businesses."

This "Commercial Activity Tax" is harder to dodge than the city's current business income tax on profits (many companies, especially out-of-state firms, claim no profits here.) Williams and Green say it's also fairer than the state corporate income tax: "The ultimate goal of the Commercial Activity Tax is to help make the city and state more competitive in retaining and attracting businesses."

Posted by Joseph N. DiStefano @ 3:26 PM