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Republican Governor Tom Corbett is deciding whether or not to sign legislation that would require some workers to pay taxes to their bosses. Yes, you read that right. The bill, which would allow companies that hire at least 250 new workers in the state to keep 95-percent of the workers' withheld income tax, is an effort to to recruit Oracle to the state.
Your taxes would get withheld by your boss like normal, but they would then keep them and spend it on private jets or monogrammed bathroom fixtures or whatever instead of turning them over to the state--turning your tax dollars over to the state being the whole reason they were ostensibly "withheld" in the first place.
In some sense making workers pay taxes directly to their boss is just cutting out the middleman: lavish corporate welfare in the form of taxpayer subsidies to business is the norm. States fall over each other in a rush to make themselves look the most appealing--meaning low taxes and wages alongside weak labor and environmental protection--and then sweeten the deal with specially-tailored giveaways to lure specific companies (see Corbett's $1.6 billion tax credit to Shell oil).
A spokesperson for Senate Majority Leader Dominic Pileggi (R-Delaware) told The Inquirer, which ran this very under-covered story on their front page yesterday, that the measure is "another tool for the state to attract quality jobs." State Sen. Jim Ferlo (D-Allegheny), however, complained that it amounted to "waylaying those employees' wages, almost akin to Jesse James robbing a bank, and we're going to put it back in the pockets of one company, in one locale, in one county, in one job site."
The law passed with support from both parties, though with much stronger Republican backing. Perhaps the most shocking hypocrisy is that state Rep. Daryl Metcalfe, a right-wing libertarian who campaigns for "getting state government off our backs and out of our pockets," voted for the corporate welfare bill.
"Targeted tax incentives are a poor substitute for across-the-board tax reductions that apply to all businesses," says Commonwealth Foundation's Jay Ostrich, expressing a more consistent conservative position. "When government has picked winners and losers with tax credit programs history has shown poor results for accountability and transparency, including failing to actually verify that actual jobs were created."
The bill passed the legislature last week without the public ever paying that much attention. At this point, voters can contact Governor Corbett's office at 717-787-2500. Or maybe Oracle has something to say about whether they think it's appropriate for their workers to pay them for jobs: 650-506-7000.
Good Jobs First, which has researched this and other instances of corporate welfare, found that laws in 16 states have allowed more than 2,700 companies to pocket $700 million of their workers' tax dollars. The left-leaning Pennsylvania Budget and Policy Center also has detailed criticism here.
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