PA Needs PEP! to Create Jobs
10/18/2012
There is a tax-free way to jump start Pennsylvania’s economy without adding to state government spending or debt. We can generate good-paying jobs for workers without further burdening Pennsylvania taxpayers. In order to do so, Pennsylvania needs a little PEP!

PEP!, or Promoting Employment across Pennsylvania, is an innovative new approach to economic development that was recently approved by the state House and Senate.

Previous approaches focused on one of two strategies. The first strategy in the past was to ratchet up state spending and send politicians across the Commonwealth to hand out huge taxpayer-funded cardboard checks to well-connected businesses. The second approach was to provide large tax cuts to businesses, with little assurance that these would create new jobs. Both approaches cost taxpayers money.

To explain just how PEP! would work, consider the stories of the following Pennsylvanians.

Gary is a hard-working carpenter who is blessed with a wife and an 8-year-old daughter who love him. Three years ago, Gary lost his job due to no fault of his own. Home construction dried up as a result of the Great Recession. Since then, Gary has worked at several part-time jobs, none of which pay as well as the one he lost. His wife has also taken some part-time jobs to make ends meet. The family has no health insurance and lives paycheck to paycheck.

John owns a medium-sized business and puts in 80-hour work weeks to keep his company above water. He’d love to hire more workers for his business, but he simply can’t afford it right now.

Finally, Rosie is a single mother with a young child, Jessica. Jessica’s father passed away when she was only a baby and, since then, her mother has struggled to make ends meet. Rosie works two jobs but still can’t afford to pay for all of their necessities. The state and county have assisted her in the past, but revenue decreases that resulted from the economic downturn could leave Rosie and her daughter without the critical help they need.

PEP! would help Gary, John, Rosie and Jessica. The proposal would allow John to keep a large majority of the state Personal Income Tax that he would usually withhold on behalf of the 250 new employees he’s going to hire. Allowing him to reinvest that money will help him to afford to hire new workers, like Gary.

At the same time, it won’t cost the state a dime. Remember, right now, John hasn’t hired Gary, so the state isn’t receiving anything. By allowing this simple tax incentive for John, the Commonwealth will actually increase its revenues. John will likely pay increased business taxes on the enhanced profits that will result from adding to his workforce. Gary will be able to purchase more things for his family, which will add to the state’s sales tax revenues.

Both of these developments are good news for Rosie and Jessica. The new state revenues could be used to help hire more teachers for children in Jessica’s school. Or, the money could be used to help Rosie pay for the necessities that she and Jessica can’t afford.

If we don’t have PEP!, Gary won’t get his new job, John won’t expand his business, and Rosie and Jessica won’t receive the help they need. They’ll all be stuck exactly where they are right now.

While Gary, John, Rosie and Jessica are all made-up characters, their stories are all too real for many Pennsylvanians still suffering through the effects of the Great Recession. We can reverse the trend, promote private-sector job creation and support those in need without further burdening taxpayers. All it will take is a little PEP!

State Representative Kerry Benninghoff
171st District, Pennsylvania House of Representatives
Contact: Dan Massing
dmassing@pahousegop.com
717.772.9845
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