Workers hit by the natural gas slump in western PA received some much needed good news this week. Shell announced they will proceed with building a multibillion dollar chemical “cracker” plant in Beaver County.
Shell probably wouldn’t have picked Pennsylvania without millions in tax incentives, but that isn't proof that corporate welfare works. Rather, it shows business climate and tax rates matter.
As expected, a slew of press releases from Gov. Wolf and other elected officials took credit for the expected jobs, but did you know Pennsylvania lost 17,000 jobs last month? Doubtless no politician is sending out news releases accepting the blame.
Truth is: The majority of Pennsylvania jobs are created by thousands of small businesses that don’t get tax breaks or government subsidies. These businesses continue to suffer under the one of the most most oppressive tax burdens in the nation.
Despite our 9.99 percent corporate income tax, (second highest in the nation) Pennsylvania added 55,000 jobs over the past 12 months, and that was a bad year.
So while we can celebrate that Shell will employ thousands of workers in 18 months, and hundreds of permanent workers, it doesn’t change the fact that Pennsylvania's high taxes to are driving away jobs.
In fact from 2005-2015, states spending the most on corporate welfare saw slower economic growth than states spending the least.
Our state would be better off ending corporate welfare subsidies and using those dollars to lower the tax burden on all businesses. If lawmakers eliminated more than $700 million in corporate welfare (identified here), the corporate income tax could be lowered to 7.2 percent.
Pennsylvania should concentrate on creating a positive business climate for all businesses, not a select few.