DN Editorial: GIVE US A BREAK!

LAST MONTH, Gov. Corbett signed a bill that allows companies creating at least 250 new jobs to pocket almost all of their employees' state personal-income taxes. The workers' taxes won't go to police, teachers or roads. They'll go to their employers.

The bill's champions - which include Senate Majority Leader Dominic Pileggi - say the law will bring jobs to the state, particularly for the computer giant Oracle, which is considering a move to the Penn State region.

With the state's unemployment rate above 8 percent, it's clear that job creation needs to get far more attention from our elected leaders. But we're tired of the same old route used by "Give-It-Away" Corbett and other state leaders who insist that big tax breaks and giveaways are the most effective way.

The very generous $67 million tax break that Corbett recently arranged for Shell in exchange for the promise of 10,000-20,000 jobs is only the latest example. Every single time a state leader is hankering to make such a deal, he or she should be forced to read, and then recite in public, the history of Kvaerner, the shipbuilder who got a $430 million public subsidy in 1997 that would supposedly create 1,000 jobs.

Two years later, Kvaerner said it would stop building ships. Ultimately, the company merged with Aker. In 2010, teetering on the edge, Aker got another $42 million in state subsidies.

It's not only unclear that such generosity pays off in anywhere near the number of jobs promised, but it's also very questionable how the specific withholding-tax break actually creates jobs. Sixteen states, including New Jersey, have similar laws on the books. New York doesn't have any such law, and Pennsylvania didn't until October. Yet Pennsylvania and New York created more jobs since 2002 than New Jersey, according to the Pennsylvania Budget and Policy Center, which opposes the law.

The right-leaning Commonwealth Foundation is also against the law, arguing that it's better to lower corporate taxes for all business rather than a select few.

Kansas and Missouri businesses are fighting a border war over such tax incentives, with businesses jumping a few miles into a new state just for incentives, reaping the tax benefit without actually creating additional jobs for the region. In response, businesspeople in the Kansas City, Mo., metro area have begged the states to put a moratorium on tax incentives for relocating in the region.

In Pennsylvania, fortunately, the state Senate amended the bill so that the total benefits are capped at $5 million annually, which makes it less likely that border wars will erupt between Pennsylvania and New Jersey.

Still, the principle of the law is twisted. Elected officials who signed Grover Norquist's no-tax pledge, including Corbett, argue that government takes away too much of our hard-earned money. So why is it OK to take employees' hard-earned money and give it directly to their bosses?

Also, last we checked, taxes are something we pay into a common pool, for the good of all - not just for an individual company. This "directed tax" sets a dangerous precedent.