New York Gov. Cuomo draws the wrong conclusion

In 2014, North Carolina lost out on its bid to bring a Toyota plant to Charlotte. Gov. Pat McCrory’s Commerce Department had pledged an outrageous amount of incentives to bring the automaker here, but $107 million — yes, $107 million — wasn’t enough to “seal the deal.”

Toyota went to Texas, which had offered a little more than a third of North Carolina’s incentives ($40 million).

Commerce Secretary Sharon Decker blamed it on Texas’s favorable tax policy:

Decker told the Observer that Texas’ low taxes meant the state didn’t have to offer as big an incentives package as North Carolina to be competitive.

“We were competing against a state without personal or corporate income taxes,” she said. “It’s a challenging competitive situation for sure.”

Decker nor McCrory not anyone else in N.C. drew the obvious, proper conclusion from that problem. Instead, even though they were already cutting personal and corporate incomes taxes, they decided that what was really needed was to push for even more lucrative and flexible corporate incentives.

This desperate mindset would later result in state leaders, from the GOP-led General Assembly to the Democratic governor, Roy Cooper, producing and then deepening the “transformative” incentives used to chase the likes of Foxconn, Amazon, and Apple. So far, thankfully, without success.

New York Gov. Andrew Cuomo is facing criticism for the massive incentives his government paid for half of the new Amazon headquarters project: $1.525 billion. His response showed he was drawing the wrong lesson, too:

Gov. Andrew Cuomo defended the deal, arguing that New York has to offer incentives because of its comparatively high taxes. At 6.5 percent, New York’s corporate income-tax rate is only modestly higher than Virginia’s 6 percent, according to the Tax Foundation. But other business and individual taxes are higher in New York.

It’s not a level playing field to begin with,” Mr. Cuomo said in an interview Tuesday. “All things being equal, if we do nothing, they’re going to Texas.

Why do these people act as if government policies were writ in stone and handed down from on high? It’s a shame seeing them act like Curly Howard declaiming “I’m a victim of circumstance!

It’s not as if Texas was minding its own business and suddenly won the low-tax business-welcoming climate lottery. Texas adopted policies that economists have consistently shown to promote stronger economic growth.

And here’s the kicker: Cuomo and others know it! So if you think your taxes are too high to attract industry, lower them!

Jon Sanders / Research Editor and Senior Fellow, Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...