This lengthy Charlotte Observer article looks at some of the behind-the-scenes dealings between state “economic developers” and major corporations. In short, the government agents attempting to bribe big companies to come to NC by offering them taxpayer handouts and tax exemptions not offered to other companies. In particular, the article focuses on the competition NC faces from our neighbors to the south for some recent development deals.
• To win a new plant being built by the Keer Group, a Chinese textile company, South Carolina dangled an incentives package 10 times larger than North Carolina’s, the emails show. “SC is working them hard,” April Kappler of the N.C. Commerce Department wrote in an email before a visit with the company.
But it became clear that corporate income and franchise taxes in North Carolina “were significantly higher than the competing locations,” Fleetwood, of the commerce department, wrote in an email. Giti estimated that the potential cost of taxes, minus incentives, was $172 million over 26 years in North Carolina. That was more than 10 times the $14 million in the lowest cost state, which she didn’t identify.
I’m sure this article had left-wingers like the Budget & Tax Center once again confused, because they attempted to tell us in 2013 that “taxes don’t matter” to corporate investment decisions. Obviously, taxes matter – they matter a great deal.
Instead of getting caught up in bidding wars with other states to land the latest big fish, a much better approach would be to eliminate state personal and corporate income taxes. What better tax incentive package would there be than that?