Pennsylvania and Ohio’s Approaches to Economic Freedom: Jonathan Williams on Pennsylvania Newsmakers
"While Pennsylvania has been stagnant, Ohio has changed its fortunes because of free market policies."
On the Pennsylvania Newsmakers program, ALEC President and Chief Economist Jonathan Williams spoke with host Jerry Bowyer about Pennsylvania’s economic outlook ranking (34th) in Rich States, Poor States.
“Everyone realizes that Pennsylvania is lagging behind when it comes to outmigration,” Williams noted. “Pennsylvania lost 200,000 plus residents on net to the other 49 states over the last decade alone coming in far behind in the bottom 10 of states on GDP growth over that same period of time, and in terms of job growth, also in the bottom half of states.”
This case study with Pennsylvania has other states reconsidering how they approach policy decisions and their impact on economic competitiveness. Williams highlighted how Ohio has climbed from 46th to 15th in economic outlook rankings due to free market policies.
“The top line number now for Ohio is incredibly 15th best,” Williams emphasized, “so Ohio now is substantially ahead of Pennsylvania in this race for economic competitiveness.”
He explained that one such policy decision that helped Ohio was the implementation of a competitive 2.75% flat tax rate, while Pennsylvania relied on a flat income tax.
“While Pennsylvania has been stagnant in the bottom tier of states, Ohio has really changed its fortunes because of free market policies like tax cuts and deregulation.”
Bowyer followed up by asking which proposed policy improvements would yield growth for Pennsylvania in the future.
“Having a state-level inheritance tax on the books is economic malpractice,” Williams emphasized. “It brings in no net revenue when you think about the dynamic effects of it, because you’re losing people and giving them that one more incentive to move to Florida towards the end of their lives.”
In addition, he suggested implementing right-to-work laws to allow employees freedom of union membership choice and managing state debt levels to ensure future taxpayers are not burdened by rising costs or inability to cut taxes to start the process of renewed growth.
“At the end of the day, the economic benefits and the job creation that come with being a right-to-work state, also come with the inherent freedom of the individual to have that choice whether they’d like to be a member of a union or not as a condition of their employment.”