Gov. Perdue unveiled details of her small business relief plan over the weekend. Sadly, her proposals will do nothing to help North Carolina’s economy or create jobs; and will put even more pressure on the state’s already strained budget.
Gov. Bev Perdue on Friday released a $17 million proposal of small business initiatives she wants state lawmakers to pass, saying the package would help protect the backbone of the state’s economy and hasten the recovery.
Perdue, who unveiled her list in Asheville, wants legislators returning to work next month to approve or expand about a dozen tax incentives, grants and other provisions. She wants the state to guarantee a portion of federal small business loans and expand on her executive order giving favorable treatment to North Carolina firms seeking state contracts.…..
The governor wants lawmakers to give favorable capital gains treatment for the founding interests on a company, revive a tax credit for small businesses that provide health insurance to lower-income workers, and offer a tax break for their equipment purchases.
For more details on the Governor’s plans, see her press release.
A paltry $17 million in targeted tax breaks and incentives? Please. To put that in perspective, that is less than one-tenth the size of the “individual income surtax” Perdue approved in this year’s budget – a tax that will effect many North Carolina small businesses because roughly 90% of all North Carolina businesses file the individual tax. And let’s not forget the more than $800 million hike in sales taxes that will drain money from the pockets of consumers, leaving them with less money to spend on the goods and services created by North Carolina small businesses.
Furthermore, notably absent from Perdue’s plan is just how these targeted tax breaks and incentives will be paid for. The state budget will be facing a deficit of $1.2 billion or more for the coming year – does Perdue think it a good idea to add another $17 million without recommending any specific cuts?
Bottom line is this: an across the board reduction in tax rates on North Carolina businesses, to be “paid for” with sensible reforms like reducing corporate welfare payments and eliminating a number of already-existing targeted tax breaks would be a much more responsible plan.