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By David Fillman

The recent leak of the "Panama Papers", which revealed how global power players from the President of Russia to the Prime Minister of the United Kingdom use offshore bank accounts and shell companies to conceal their wealth or avoid paying taxes, reads like a pretty good spy thriller.

David Fillman

Here in Pennsylvania, corporations have been hiding their profits and avoiding paying their fair share of taxes for years.

It's a perfectly legal practice that costs every single taxpayer some of their hard-earned dollars each year.

It's called the Delaware loophole and here's how it works: Large corporations in Pennsylvania exploit a state law that allows them to establish holding companies in Delaware.

They transfer all profits earned in Pennsylvania and trademarks to their Delaware subsidiary for one reason and one reason only - Pennsylvania has a corporate income tax; Delaware does not.

In Pennsylvania, 71 percent of companies subject to the corporate net income tax pay no tax, according to the Pennsylvania Budget and Policy Center.

In 1994, 75 percent of corporations paid $1,000 or less in corporate income taxes.

By 2003, 84 percent of all corporations were paying that much, the PBPC reports. That is less than a Pennsylvania family earning $36,000 a year pays in annual income taxes.

The Coalition for Labor Engagement and Accountable Revenues (CLEAR) has advocated for years to close corporate loopholes to make our tax system fair for all Pennsylvania businesses and Pennsylvanians.

There is no reason why big corporations should be able to 'hide' profits in shell corporations set up in Delaware.

We are missing out on hundreds of millions of tax dollars that should be used to educated our students, provide human services to our most vulnerable and help create jobs in our Commonwealth.

With recent enactment in Rhode Island and Connecticut, 25 out of the 45 states that have some form of corporate income taxation, plus the District of Columbia, now mandate combined reporting.

And it is time -that lawmakers in our Commonwealth step up and put families first - ahead of corporate special interests. Our state's finances are a mess.

Pennsylvania's Independent Fiscal Office and independent fiscal rating agencies including Moody's and PNC Financial Services Groups agree that Pennsylvania confronts a $1.6 billion to $2 billion deficit.

School districts around the state were forced to borrow more than $1 billion during the budget impasse just to keep the doors open.

The interest on those loans, by the way, would be better spent in our classrooms than in the pockets of bankers.

Our lawmakers need to pass a real, on-time budget that closes this deficit. Eliminating the Delaware tax loophole is a good place to start - but closing this hole is just a starting point.

Lawmakers also need to, once and for all, enact a statewide tax on the Marcellus shale drillers.

Our state is the only 1 of 11 major gas producing states that does not impose such a tax and there is simply no justification for this giveaway.

Pennsylvanians will not tolerate another budget impasse that jeopardizes schools; food banks; grants for college students; shelters for battered and abused women; support and counseling for rape victims; and scores of social services for the needy.

Pennsylvanians do not want their tax dollars going to big banks for interest payments on loans that schools had to take out this year just to keep the doors open.

It is time for lawmakers to do their job by making our tax system fair for all Pennsylvanians and by passing an on-time budget that funds our schools and life-saving programs.

David Fillman is the executive director of Council 13 of the American Federation of State, County and Municipal Employees and a co-founder of the CLEAR Coalition.