Gov. Roy Cooper has praised himself for directing nearly $70 million in three months to 35 different companies. At the same time, he has castigated the legislature for a franchise tax cut that would let all companies here keep $252.2 million in 2020-21.
Meanwhile, Cooper’s fans penning unsigned editorials for Capitol Broadcasting Company (CBC, parent company of WRAL) are also castigating the legislature for corporate tax cuts going back to 2014, which let companies here keep $89 million this year. Even though they had demanded the legislature pass an unprecedented “large incentives package” for Amazon.
The legislature and governor later agreed to massive incentives for “transformative” corporate projects, such as Amazon’s or Apple’s.
Feeling confused? Maybe this will help.
Four possible combinations, four different outcomes
There are four possible policy combinations concerning corporate taxes and corporate welfare. Both the governor and CBC are advocating the same one. It’s not the policy combination that would grow the economy and expand freedom, not by a long chalk.
Here are the policy combinations:
Freedom & Growth
Low corporate taxes, low corporate welfare
High corporate taxes, low corporate welfare
Low corporate taxes, high corporate welfare
Central Planning & Cronyism
High corporate taxes, high corporate welfare
Astute readers will see that neither side in the budget debate is arguing against high corporate welfare. What’s at issue, then, is corporate taxes. So the debate is between Redistribution, Pro-Business (legislature) and Central Planning & Cronyism (governor and media).
- our Policy Position on Economic Growth
- our Policy Position on Tax Reform
- our Policy Position on Red Tape and Regulatory Reform
- John Hood’s survey of academic literature supporting Lower Taxes, Higher Growth
- My research brief on the 14 things corporate executives say is more important than corporate incentives to a state’s business climate