August 27, 2009
Back to Columns

Picking Winners and Losers
By Senator Mike Folmer

A key principle of my Promise to Pennsylvania is to make the state’s job climate more competitive.  After witnessing federal and state government efforts to attract and maintain jobs, I’m more convinced than ever that having government select corporate winners and losers (i.e. which businesses receive bailouts or which ones continue to do business in PA) doesn’t work.  We all pay the price for company failure through higher taxes and lost job opportunities.

Small businesses are particularly vulnerable to economic downturn; profits are down and owners struggle to keep their doors open. It’s unfortunate when these businesses – many of which are the backbone of small communities – go under. Few government leaders even pay attention. 

We have all heard the saying 'an ounce of prevention is worth a pound of cure.' Government needs to take this advice. The American Legislative Exchange Council (ALEC), a non-partisan, membership organization of state legislators, recently released its 2009 index of state economic competitiveness.  Pennsylvania ranks 46th in its 2009 economic performance and 42nd in its 2009 economic outlook.

The Rendell Administration continues to tout spending, borrowing, and economic development programs as the solution to job maintenance and creation. What they fail to realize is there are a host of government-imposed factors that keep Pennsylvania noncompetitive in today’s economic area. Our top-marginal 7.05 percent Personal Income Tax Rate (PA ranked 36th worst in the nation by the ALEC report); top-marginal 13.97 percent Corporate Net Income Tax Rate (ranked 49th worst in nation by the ALEC report); death tax (ranked 50th); debt service of 9.3 percent (ranked 41st); and property and sales tax burdens all make Pennsylvania one of the worst states to do business.

You can't read a paper that does not mention a company considering leaving Pennsylvania – a recent victim being Carlisle Tire & Wheel and their 340 employees. The company moved operations to Tennessee. Next on the chopping block may be the Harley Davidson plant in York – 2,000 jobs and the livelihood of a community are at stake. A decision by Harley management on the fate of the York plant will be made soon. 

Over taxing Pennsylvania businesses and individuals just so a handful of government leaders can decide which corporations stay or which go does not create a competitive job climate. 

Effectively spending tax dollars and living within a budget is the best way government can spur the economy. Taxes are your money and you should decide where and how to spend it – not government.