There was a very telling exchange between Commerce Sec. Sharon Decker and the House Commerce Committee today:
Reducing North Carolina’s corporate tax rate won’t allow the state to cut all incentive programs, Commerce Sec. Sharon Decker told the House Commerce Committee Wednesday. …
Rep. Chris Millis, R-Pender, said the idea of continuing to give incentives troubled him. Why, he asked, should one business be taxed so that a competitor can be brought to the state.
“That direct transfer of public dollars to a private individual makes me nervous,” he said.
Decker said that North Carolina could not afford to do away with incentives for recruitment and retention of businesses entirely. All such programs administered by the Commerce Department, she said, required companies to produce promised jobs and meet other goals.
“I do think in today’s competitive environment, that we are taken off the list if we don’t have those tools in our quiver,” Decker said.
Quivers, of course, are for holding arrows. But those unimaginative only-government-creates-jobs politicians do so love their hammers!
They’re so busy focused on the benefits of economic incentives to their handpicked winners that they miss entirely the costs of those handouts to everyone else. They believe their own economic impact models that the things are all benefits, no cost.
If economic development is like archery, it’s no wonder they’re so frequently off the mark with their arsenal of bow-strung hand tools. Such as the new saw that the governor is getting the private sector involved in economic development.
Rep. Dana Bumgardner, R-Gaston, and Rep. Jeff Collins, R-Nash, pressed Decker on whether getting rid of the corporate tax rate would help the state attract more jobs. Decker’s response: “I don’t know if it’s better. It’s different.”
Of course it’s different. It’s all-inclusive. And it means entrepreneurs and job creators get the credit for entrepreneurship and job creation, not glory-hogging politicians. As I said before, the very existence and rationale behind incentives show that lower taxes and regulations entice industry to come to North Carolina. That being the obvious case,
why offer them to just a few industries? Why not give them across the board?
Cutting taxes, including the corporate income tax, would have a strong stimulating impact on the state’s economy, in terms of permanent job creation, outside investment, and greater economic growth, leading to greater state revenue.
