On Amazon and Unilaterally Disarming Corporate Welfare

Amazon just announced that instead of one “HQ 2”, they will chose two new facilities—neither of which will be in Pennsylvania, instead choosing New York and Virginia.

This shouldn’t be a surprise—though both Pittsburgh and Philadelphia made a bid. How much those cities promised Amazon in tax breaks and subsidies is still unknown, because Gov. Wolf and city officials have sued to keep that information secret. What we do know is corporate welfare doesn't work.

As we note in a recent fact sheet, corporate welfare has a long history of failure in Pennsylvania. Bribing companies to build in the Keystone State doesn’t solve the underlying problem of a high tax burden—that keeps business away and hinders the growth of the one million small businesses in Pennsylvania.

We don’t need to disarm on economic development; we need to arm ourselves with a more effective tool.

 

Indeed, Pennsylvania leads the nation in corporate welfare spending, but lags the nation in job growth.

The most common objection to ending corporate welfare is “every other state does this, we can’t unilaterally disarm.”

That’s a poor idiom. We don't need to disarm on economic development; we need to arm ourselves with a more effective tool.

As I noted in a recent letter to the Pittsburgh Post-Gazette on subsidizing sports stadiums, we have to consider what’s more effective: subsidies for some, or lower tax rates for all?

Instead of a high tax rate on all businesses, with special tax breaks for the few corporations with effective lobbyists and political connections; a lower tax rate for all Pennsylvania companies and a friendlier business climate is a better economic development tool.

That’s how Pennsylvania can attract jobs.