Pennsylvania’s Economic Outlook Among Nation’s Worst

The annual Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index ranked Pennsylvania among the least economically promising states. Since 2008, Pennsylvania’s economic outlook has dropped from 36th to 43rd place.

The commonwealth’s tax policies were a major contributor to its rankings (1 is best):

  • 35th Top Marginal Personal Income Tax Rate
  • 49th Top Marginal Corporate Income Tax Rate
  • 27th Property Tax Burden
  • 50th Estate/Inheritance Tax Levied
  • 42nd Recent Legislature Tax Changes
  • 35th Number of Tax or Expenditure Limits
  • 42nd Remaining Tax Burden

In addition, Pennsylvania tied for last place in labor competitiveness, largely because Pennsylvania is not a Right-to-Work state.

Antony Davies, Associate Professor of Economics at Duquesne University and a member of the CF Council of Scholars, warns of the consequences that excessive government taxation and regulation have on the economy. “The harder state governments make it, both in taxes and in regulations for entrepreneurs… the more likely they’re going to be to throw up their hands and say it’s easier to work for somebody else. Every time an entrepreneur does that, we lose jobs.”

Making Pennsylvania a “rich state” that attracts job creators will require a paradigm shift where government focuses on delivering core services through streamlined regulations and taxes.