Jobs & the Economy

By John P. Williamson

Pennsylvania has the 3rd highest corporate taxes in the United States. Yet, our elected officials claim to want to bring jobs to the state. The current Pennsylvania corporate tax policy contradicts this claim. Maintaining the highest level of corporate taxes in the United States is a disincentive to new businesses considering a move into our state, and a reason why existing businesses would explore leaving for a more friendly tax environment. "If you want less of something, tax it."

Recently, our state government auctioned off drilling rights into sections of the Marcellus Shale region + an energy-rich resource within our state which holds the potential for 30,000 new jobs, and $20 Billion in new business over the next 10 years. The stated hope of the administration was that the leases would generate $140 million in state revenue. But the leases actually generated about $1 Billion!

Most sensible people would have begun to rejoice at the unanticipated windfall of $860 million. But not our state government. Instead, the Democrats immediately called for a heavy "severance tax" on any natural gas extracted from the Marcellus Shale, and Greg Vitali even wrote a bill which would put a stop (moratorium) to any development of the Marcellus Shale for at least 3 years!

Other states which have deposits of natural gas, and who impose a severance tax, have done so only 10-15 years after the initial start up expenses of the drilling companies have been made. But the knee-jerk reaction in our state government is to kill the Golden Goose before it has a chance to lay its Golden Eggs.

If Pennsylvania is to attract businesses, it must learn to avoid its lust for punitive taxation on Business. Corporate taxes need to be reduced to become competitive with our neighboring states. A welcoming atmosphere to Business needs to be cultivated, and some period of tax abatement for new companies moving into our state should be implemented. By creating a business-friendly environment, and resisting the urge to impose taxes on new Pennsylvania businesses, we can trigger a period of dramatic growth, and bring tens of thousands of good-paying jobs to Pennsylvania."If you want more of something, subsidize it."

The current economic malaise, job losses, and loss of businesses in Pennsylvania has resulted from our state government pursuing "tax & spend" policies which are counterproductive, and which discourage growth and prosperity. If we are to improve our state's Economy, and bring Jobs to Pennsylvania, we simply have to implement Economics 101.