In an interview that was published in the Harrisburg Sunday Patriot-News on October 7, 2012, Pennsylvania’s leading brewmaster Dick Yuengling, Jr.,President of D.G. Yuengling & Son, -America’s oldest brewery – (headquartered in Pottsville, PA) said that due to tremendous growth of his company and demand for his products he will have to build another brewery, perhaps within two years.
You would think this would be great news for Pennsylvania – a Pennsylvania company saying that it has to grow and create new jobs in a sluggish economy – and that Pennsylvania workers and the state would benefit in Yuengling’s planned expansion.
However, think again.
In the article, Mr. Yuengling was rather blunt in the fact that he doubts we will build the new brewery in Pennsylvania. The reason? He says the decision “comes down to taxes, incentives and the state’s business climate.”
Part of the reason is that Yuengling says that he “can never be certain which way the state is leaning in terms of its tax and business policies.”
Why is Mr. Yuengling uncertain? I am sure part of the reason is that Pennsylvania has the highest tax burden of all 50 states, and its high corporate tax rate makes Pennsylvania among the worst for new businesses. As the Pennsylvania Chamber of Business and Industry
notes, when combined with the federal rate, Pennsylvania has the highest corporate tax rate in the world. Add to that the fact that Pennsylvania is the only state that has a Corporate Net Income tax and a tax on assets, which must be paid regardless of whether or not a company earned money.
While this Pennsylvania business leader likes Pennsylvania’s location, he’s just not sure it is the right spot for his expansion. “Pennsylvania is a great location. But it’s not very business-friendly. You look for fair tax breaks, fair taxation. And the bottom line is more jobs,” says Yuengling in the article.
Lawmakers need to carefully consider Yuengling’s concern about the right business environment to create new expansion, and most importantly, new jobs. They need to let business leaders like Mr. Yuengling know that he can be certain that Pennsylvania is serious in
terms of its tax and business policies that will lead to more jobs and a better business environment.
In particular, lawmakers need to move on reforms and reductions in business taxes that can send the message to job creators like Mr. Yuengling that they should expand in Pennsylvania as opposed to another state. Steps to show this would be eliminating the cap on Net Operating Losses, moving towards a Single Sales Factor and reducing the Corporate Net income tax rate. Decreasing regulations on businesses would also be a step in the right direction.
These steps would be a great way to show that Pennsylvania is leaning in the right direction in terms of tax and business policies and in keeping and creating more jobs in the Keystone state.
Clifford Frick is the Administrative Director of The Susquehanna Valley Center for Public Policy
Nothing contained here should be considered as an attempt to aid or hinder any passage of legislation in the General Assembly.