As a small business, we were encouraged to learn of the legislative efforts of Pennsylvania State Senator Bob Mensch (R-24) to reduce the Commonwealth’s income tax and return that money to working Pennsylvanians and spur economic growth in the state.

                Senate Bill 1361,was introduced by Mensch and co-sponsored by Senators Jane Orie (R-40), Mike Folmer (R-48), Stewart Greenleaf (R-12), Jeffrey Piccola (R-15), Edwin Erickson, (R-26), Richard Alloway (R-33), Kim Ward (R-39), Donald White (R-41), Michael Waugh (R-28) and John Pippi (R-37).  The bill would decrease the personal income tax, paid by both individuals and businesses, from 3.07 percent to 2.99 percent.  The legislation is now in the hands of the Senate finance committee.

                It is an embarrassment that, of all the states, Pennsylvania ranks 45th in the nation for creating jobs.  That is unacceptable and must be addressed.  Small businesses continue to be hit hard in Pennsylvania, yet they account for employing 70 percent of the workforce!

                According to a recent analysis performed by The Commonwealth Foundation, when the state’s personal income tax was raised from 2.8 percent to 3.07 percent back in 2003, Pennsylvania suffered a 36,000 decrease in jobs created in the years immediately following the increase.  The Commonwealth Foundation is an independent, non-profit research and education institute.

                For small businesses, Mensch’s proposed tax break is intended to provide some breathing room for companies that are struggling to survive.  For that, small business owners will be thankful.  But it is also intended to enable small business owners to invest in their business and create new job opportunities.

                In order to support both goals effectively, perhaps a caveat should be added to the bill that provides the tax break but also offers a tax incentive to those who actually invest in their businesses or create new jobs.  That would further encourage owners to use the break for what it is intended instead of just putting the money in their own pockets.

                For a taxpayer earning $30,000 per year, the savings would be $81.  To those who don’t need it, it doesn’t sound like a lot of money.  But to those who do need it, it’s a step in the right direction.

                Our legislators need to learn how to bring new jobs into Pennsylvania and keep them here. 

                Every journey begins with a first step.