ShareThis Page

Picking favorites: Creating losers

| Sunday, Jan. 26, 2014, 9:00 p.m.

Fifteen-million dollars worth of Keystone Innovation Zone tax credits to 202 tech startups represent Harrisburg's latest attempt to pick economic winners. But all Pennsylvania businesses and taxpayers would fare far better if the commonwealth offered a uniformly lower tax environment.

State-favored status bestowed by the Department of Community and Economic Development gives these startups an unfair competitive edge over rival businesses burdened by the full weight of Pennsylvania's 9.99 percent corporate net income tax. Eliminating all such state tax credits, incentives and subsidies would enable a 2-percentage-point reduction in that tax rate, to 7.99 percent, estimates the Commonwealth Foundation's Nate Benefield.

He says Pennsylvania keeps trying to pick winners — and, we add, creating losers — because it's “press release economics” offering self-promotion opportunities for politicians and bureaucrats that an across-the-board corporate tax cut wouldn't.

Jake Haulk of the Allegheny Institute for Public Policy says state government “has become addicted to handing out checks,” a practice that devolves into crony capitalism while creating a Pavlovian mindset among companies, “ruining the free enterprise system.”

This practice must end. It forces taxpayers to act as unwilling venture capitalists and leaves intact Pennsylvania's unfriendly, uncompetitive overall business tax climate. And that's a powerful incentive for companies to set up shop elsewhere.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.