The non-partisan Tax Foundation recently released its 2015 State Business Tax Climate Index. This annual report assess and appraises each state's competitiveness as affected by the tax structure within.
This Index compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property.
Pennsylvania's overall ranking this year is 34th, less than average and definitely not where we want to be on any sort of list comparing the states. While we're doing better than some other states, there are clearly a lot of improvements to be made. More disturbingly this year's Tax Foundation 2015 State Business Tax Climate Index reveals that Pennsylvania comes in at #46 among the 50 states in its corporate tax ranking. Clearly there is work that can and should be done here to make our home a more attractive and competitive place for business owners to relocate and expand their businesses. This is key to helping put more of our friends, family and neighbors back to work.
At the same time, we cannot and should not seek to penalize the industries or areas that are doing well in these tough economic times.
As President Ronald Reagan once said, "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
We would be wise to heed these words with regard to fracking and so-called energy taxes within our Commonwealth. Governor-elect Wolf has indicated that he believes a severance tax on the value of natural gas produced would provide "desperately needed revenue" for the Pennsylvania budget.
But like so many states, I would contend that we do not have a revenue problem; we have a spending problem.
As we all know, the federal government has been trapped in an unenviable cycle of out-of-control sending, taxation and debt. This year, Pennsylvania's Tax Freedom Day, the day on which the taxpayers of our Commonwealth have paid off their federal, state and local tax burden combined for the year fell just one day before the National Tax Freedom Day.
The reckless policies of Washington, D.C. are not something we should attempt to emulate here are home.
When it comes to economic freedom, we should be more than one step ahead and more than one day ahead of the federal government in Pennsylvania. We need policies that provide tax relief, create jobs and increase competitiveness and we need them now.