We're excited to announce the launch of Commonwealth Insight, a biweekly podcast where we'll bring you conversations with thought leaders and influencers from around our state and the country.
In our first episode, I interview Evan Baehr, president & co-founder of Able Lending which helps small businesses find the capital they need to survive and thrive. Evan is also the author of best-selling fundraising guide for startups, Get Backed.
I talk with Evan about the challenges facing entrepreneurs, why regulatory uncertainty keeps small business owners up at night, and the importance of entrepreneurialism.
Evan says, “The number one thing that troubles small business owners is uncertainty about the future of government regulation.” Look no further than the struggles Pennsylvania vape shops owners are going through for real-world affirmation of this truth.
I also talk with Matt Brouillette, president & CEO of the Commonwealth Partners Chamber of Entrepreneurs, about the greatest challenges he sees in Pennsylvania. Matt is the former, long-time president & CEO of Commonwealth Foundation. He explains how "impatient patience" is needed to change the course of our state.
Matt notes, “The policy problems we face today weren’t created overnight.” Reformers, he says, “must be willing to take incremental improvements while impatiently pushing for even bigger ones.”
Let us know what you think and keep an eye out for our next episode in two weeks!
posted by DOUGLAS BAKER | 04:09 PM | Comments
In Pennsylvania, civil asset forfeiture laws allow law enforcement agents to legally seize property without convicting an individual of a crime. These laws turn justice on its head, allowing police to presume individuals are guilty until proven innocent.
CF’s Bob Dick sat down with WURD Radio's Stephanie Renée to talk about the abusive nature of civil asset forfeiture.
[Civil asset forfeiture] allows the government to come in and take the property away from someone who may be innocent, or in many cases is innocent…in order for that person to get their property back, they have to go to the government and prove their innocence.
This legalized abuse can be overwhelming for individuals and families with limited financial resources because they are forced to prove their innocence through long, expensive legal battles.
Bob recounts the story of Chris and Markela Sourovelis who had their home seized because their son had been caught with $40 worth of narcotics. The parents committed no crime, but prosecutors determined their house, “an inanimate object”, to be guilty.
Click here or listen below to hear more.
The Mid-Morning MOJO with Stephanie Renée airs Mondays through Thursdays on 900AM-WURD.
Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.
And for mobile listening, get the SoundCloud iPhone and Android apps.
This week a “Republican wave” swept the country and propelled many fiscally conservative governors to reelection. And in Pennsylvania, candidates that ran on pension reform, liquor privatization, choice in education, and paycheck protection were elected—expanding Republican control of the state Legislature.
So, why did the same voters hand the keys to the governor’s mansion over to a candidate promising higher taxes and more spending?
Matt Brouillette, discussing the election results on WSBA’s The Gary Sutton Show on Wednesday, offers an explanation:
Ultimately it was [public sector union leaders] using tax payer collected union money that framed that narrative of billion dollar cut in education, a lack of a severance tax—these were the things that unfortunately Tom Corbett was not able to counter, nor did he confront it head on.
Matt says governors in other swing states took a more direct approach to combating government union leaders’ undue influence and were rewarded by voters:
This biggest takeaway I think, and we certainly see this in the context of nationally, where you saw Republican governors in blue states—such as Scott Walker in Wisconsin, Rick Snyder in Michigan, as well as Bruce Rauner who is the governor elect in Illinois—these folks took head on the opponents of the taxpayers and that was the public employee unions. When you have bold leadership and you fight those battles that are absolutely necessary, you will win!
Listen here or below:
The Gary Sutton Show airs daily on WSBA 910AM in the York area.
Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.
Big news out of California, where a state judge struck down that state's teacher seniority and tenure laws. The lawsuit was filed by 9 students who believed that teacher tenure rules and Last-In-First-Out policies hurt good teachers, and thus hindered their ability to get a quality education.
The court agreed!
What do teacher union CEO's have to say about this ruling? They ignore the issue, and instead point to the usual bogeymen with name calling. Here's NEA president Dennis Van Roekel:
This lawsuit was never about helping students, but is yet another attempt by millionaires and corporate special interests to undermine the teaching profession and push their own ideological agenda on public schools and students while working to privatize public education.
Pennsylvania has its own opportunity to reform antiquated seniority laws and protect excellent teachers, putting kids first. HB 1722, which would use the new teacher evaluation system rather than seniority only for furloughs and rehiring decisions, passed the House Education committee last week.
Happy Tax Freedom Day!
It took from January 1 until today for Pennsylvanians to have earned enough income to pay off their federal, state, and local taxes for the year.
The Tax Foundation's annual Tax Freedom Day is a tool for highlighting the total cost of taxes, as few people truly realize how much of a bite taxes take out of our economy.
This year, taxes will consume nearly one-third of our income—more than we pay for housing, food and clothing combined.
Federal charges of racketeering and arson against several Philadelphia union members, who called themselves The Helpful Union Guys (or T.H.U.G.s) has renewed interest in closing a loophole in state law, exempting parties in a labor dispute from prosecution.
Under current law, anyone involved in a labor dispute is exempted from laws against stalking, harassment, and even threatening to use weapons of mass destruction (WMDs). In a recent court case, charges of harassment against a union leader stemming from threats made at a restaurant were dismissed on grounds that it was related to a union dispute.
HB 1154 would remove these exemptions. Shockingly, union leaders defend the exemptions. They argue that stalking, harassment, and threatening to use WMDs are somehow vital to free speech. They also offer the defense "hey businesses do it too."
"We think the law works," Pennsylvania AFL-CIO president Rick Bloomingdale said to reporters last week, explaining that the exemption is necessary to protect labor free speech rights. ...
Frank Snyder, secretary-treasurer of the Pennsylvania AFL-CIO, tells the Lehigh Valley Morning Call the exemptions protect free speech and claims National Labor Relations Board figures "show employers routinely, and with total disregard for the law, intimidate, harass, stalk and even fire people who try to form unions."
There's a huge flaw in Mr. Snyder's logic. HB 1154 would remove the exemption for all parties in a labor dispute, both unions and employers. If he truly believes that business owners are getting away with harassment, he should support removing that loophole from the law to crack down on abuses.
The Pittsburgh-Post Gazette reports that HB 1154 could be voted on in the Pennsylvania House this week.
Find out more about the issue at StopUnionViolence.com
In a scathing investigative report, Chris Papst at CBS 21 revealed a widespread culture in Pennsylvania's Department of Public Welfare (DPW)—and orders from supervisors—to look past fraudulent claims to enroll more people in welfare program.
DPW accounts for 40 percent of the state's budget and makes an estimated 15 percent of all Medicaid payments in error, according to a report by the Auditor General, wasting an incredible $1 billion annually.
Examples of abuse are legendary.
From taxpayer-funded cruises, to NCAA basketball games, to unnecessary luxury vehicles, DPW has had long history of fiscal profligacy.
What's the solution? Here are just a few examples from our policy report on reforming welfare.
- Utilize performance-based budgeting to expand programs that work and end programs that don't.
- Aggressively identify and cut waste and abuse by enforcing eligibility standards.
- Establish time limits on benefits and enhance work requirements to keep the safety net from becoming a permanent welfare hammock.
Watch CBS21's full report featuring a whistleblower's first-hand account of the culture of waste at DPW and comments from our own Nathan Benefield.
This morning, CF President & CEO Matthew Brouillette appeared on FOX Business's Varney & Co. to highlight the public pension crisis facing Pennsylvania and cities and states across the nation.
Matt's appearance follows his recent op-ed in Investor’s Business Daily which draws lessons from Detroit’s economic decline and bankruptcy. He warns that state and city public pension and health care costs together equal $60,000 per family of four.
The next hours and days could dramatically shape Pennsylvania's future, but will it be for the better? As time winds down before the final budget passes, several critical issues hang in the balance. Here's where you can help:
- The Senate is working out their liquor privatization plan today. Pennsylvania consumers and taxpayers deserve and demand real privatization, not half measures. Click here to write your Senator.
- A critical first step to address the state’s $47 billion pension hole passed committees in both the House and Senate, but government unions are fighting this much-needed reform. Moving new state employees to 401(k)-type plans would make retirements affordable, predictable, and current for taxpayers and employees. Click here to write lawmakers.
- Legislation that unfairly targets cyber schools continues to linger in the legislature. Click here to tell lawmakers to protect these schools of choice for more than 30,000 Pennsylvania kids.
- On Tuesday, over 50 representatives pledged to protect Pennsylvania taxpayers from expanding a failing and unaffordable Medicaid program. These lawmakers deserve our thanks, but we must continue to fight against expanding a program that fails to serve the truly needy.
If you have five minutes, please email your lawmakers about these critical, time-sensitive issues. If you have ten minutes, make a few phone calls today. Click here to look up your lawmakers.
A few readers responded to my op-ed on corporate tax reform, asking "If you want fairness, why don't you support 'ending the Delaware Loophole'?"
Unfortunately, many believe that the made-up phrase "Delaware Loophole" means businesses headquartered in Delaware evade paying Pennsylvania taxes.
To be clear, there is no loophole and it isn't specifically related to Delaware.
What those who use the term really mean is they want to shift to using Mandatory Unified Combined Reporting (MUCR) on corporate tax returns, rather than the current system of Single Filing. This means a multi-state company would have to submit returns from all their national and international operations and subsidiaries to the state Department of Revenue, rather than simply the Pennsylvania company.
That sounds boring and complicated. For those who read through that last paragraph, pat yourselves on the back.
Those pushing this agenda have masterfully crafted a talking point saying "Close the Delaware Loophole!" This term misleads people. Some think that if a company has a headquarters in Delaware or another state, they don’t pay corporate taxes.
False: Corporations, regardless of where their headquarters are, still have to pay our rate of 9.99% on their Pennsylvania profits. Changing the method of tax reporting doesn’t mean the state will get more revenue. There is little difference in revenue between states with MURC and states with Single Filing.
Moreover, the talking point that 70 percent of corporations don’t have any Corporate Net Income Tax liability is true. But it is because most corporations don’t earn profits (either because they are losing money, or because they are legal corporations without any actually operations). It has nothing to do with our Single Filing method of tax reporting. In fact, some states that use Mandatory Unified Combined Reporting also have 70 percent of corporations filing tax returns with zero tax liability.
All the move from Single Filing to Mandatory Unified Combined Reporting does is to give the Department of Revenue more power and make filing tax returns more complex.
So how do "Delaware Loophole" proponents think Pennsylvania will collect additional revenue under MUCR? It relates to corporations when they pay an affiliated company (or a holding company) for the rights to a logo, license fees, royalties, etc. These are business expenses, and are thus would take away from a company's profits. The allegation—though without much evidence—is that companies are transferring profits out of state without having a legitimate business expense. If the state shifted to Mandatory Unified Combined Reporting, it would allow the Department of Revenue to review all of a company's records.
However, another proposal put forth (currently part of HB 440) would require companies to report these sorts of transactions to affiliated companies, and would prohibit certain payments for "intangible assets." This is termed an "add-back provision."
However, "Delaware Loophole" folks still say this doesn't "Close the Delaware Loophole," which is their prerogative since they invented the phrase.
But readers should know that "Close the Delaware Loophole" is just a catch phrase to disguise a bad policy proposal.
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The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.