North Carolina's business climate ripe for recovery

North Carolina’s Business Climate is Ripe for Recovery and Growth

Data released by Secretary of State Elaine Marshall’s office reveals optimistic business conditions for North Carolina.  Despite the pandemic, “New business creations in 2021 are breaking the record set at this point in 2020 and very nearly match all new business creation filings in 2019.”

Some of this growth stems from job losses caused by Gov. Cooper’s lockdown.  However, the majority is new: “Our survey findings point toward a new era of entrepreneurship, with 81% of respondents indicating they launched their businesses in search of new opportunities, while just 12% report starting their new businesses as a result of job losses during the pandemic.”

There are a few reasons North Carolina’s business growth has flourished:

  • The government’s constriction of business during the pandemic, which stifled the natural exchange of goods and services, being lifted. As the 18th century philosopher and founder of free-market economics Adam Smith discussed, it is the “general disposition to truck, barter, and exchange.”  With shutdowns and restrictions easing, North Carolinians can get back to work.
  • North Carolina’s business climate has improved over the last decade. Important tax reforms under conservative leadership continue to encourage growth.
  • North Carolina’s low and flat personal income tax incentivizes small business growth. Small businesses do not pay the state’s corporate tax.  Rather, the majority of small businesses are organized in such a manner that they are subject to the personal tax rates.  Raising personal income taxes, as some on the left champion, would discourage growth and recovery, especially for small businesses.

Paige Terryberry / Fiscal Policy Analyst