North Carolina has long been at the top of the list of state’s with favorable business climates for site selections. But it has now dropped to number three on the list. Some tend to blame a high corporate tax. But a UNC-Chapel Hill economic researcher told a legislative committee it wasn’t that simple. Brent Lane with the Center for Competitive Economies said the reason most often given by businesses for looking at other states is the complexity of North Carolina’s entire tax code. He said it ranks 41st for favorable tax codes. Just lowering the corporate wouldn’t be enough. His colleague Jason Jolley pointed out now half the businesses in North Carolina are subject to the income tax not the corporate tax. The Civitas Institute’s Brian Balfour pointed that out in one of his articles. Lane said the code needs a complete overhaul to simplify it.
Meanwhile, Jolley told the lawmakers tax incentives weren’t creating enough jobs. He said, in fact, in some cases the incentives are reducing jobs. He said most of the incentives are used for machinery or infrastructure to replace jobs. Jolley noted only 17 percent of the tax credits are actually used to create jobs.