We're 39th! We're 39th!

JULY 16, 2013 | by DAWN MELING

CNBC just released its ranking of the top states for business in 2013.  In case you missed the subtle wording in this blog's title, Pennsylvania languishes near the bottom.

Pennsylvania turned in its worst performances in the categories of "Cost of Doing Business"and "Workforce" (44th each) and highest in "Technology & Innovation" and "Access to Capital" (5th each).

Why is Pennsylvania failing to compete, falling below even states like Illinois and New York that are hardly known for their economic growth?

You can look to this year's state budget to better understand why Pennsylvania isn't seen as an ideal destination for businesses.  While our poor ranking is hardly the result of one year's legislation, the burdens our government places on job creators were on full display. 

For the fourth time, the legislature delayed the phase-out of the Capital Stock and Franchise Tax, a double tax that discourages business investment and kills jobs. Desperate for revenue, lawmakers pushed back the phase-out of this tax—which was originally set to end in 2009—until 2016.

And what about the catchphrase "closing the Delaware Loophole?"  Instead of helping taxpayers or businesses, it merely gives the Department of Revenue more power and makes filing tax returns more complex.

Combine these unfriendly measures with the fact that Pennsylvania businesses pay the second highest tax rate on their profits in the entire industrialized world, and you start to wonder how Pennsylvania ranked as high as 39th.

It doesn’t have to be this way.  Pennsylvania is gifted with abundant natural resources, fearless entrepreneurs, and cutting-edge technologies. Lawmakers should work to cultivate the state's business environment by lowering the overall tax burden, ending the Capital Stock & Franchise double tax once and for all, and passing more business-friendly legislation such as Sen. Pileggi's and Rep. Bloom's successful effort to end the state's death tax on small businesses.

Until lawmakers recognize that it is businesses—not government—that create wealth, our rank will only drop further and we’ll continue to see Pennsylvania's job creators and job seekers head to friendlier states.



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