Looks like another multi-billion dollar corporation has succeeded in bilking millions more of our tax dollars, courtesy of the North Carolina General Assembly.
Senate Bill 575 (Hoyle D – Gaston), aka the Apple bill, would establish a different tax liability formula for eligible companies. The eligibility requirements are so specific, however, that it has become readily apparent the legislation is designed to lure Apple Computers to open a server farm in Caldwell County.
A close examination of the legislation shows the new tax formula would apply to at least three companies that already exist in North Carolina. So even if Apple doesn’t open its location in North Carolina, the new law would cause a decline in state corporate tax revenue of roughly $1.5 million annually.
Should Apple decide to build its new facility in North Carolina, there are no current estimates as to how sizeable the tax break would be. But one has to question the practice of targeted tax breaks to global giants while state budget makers contemplate broad-based, and regressive, tax hikes.
Furthermore, the notion that such tax credits will “create jobs” is completely unfounded. The capital and resources sunk into the Apple facility will not be available for other companies to expand or engage in new entrepreneurial ventures. It is these jobs that will never be created that offset the Apple jobs “created.”
Regrettably, state lawmakers continue to punish average taxpayers to benefit politically connected corporations, all in pursuit of a misplaced understanding of “job creation.” The practice of targeted tax breaks creates an uneven playing field for North Carolina businesses, and perpetuates an easily corruptible cozy relationship between big business and powerful politicians. For all of these reasons, SB 575 is this week’s Bad Bill of the Week.