North Carolina lawmakers and the business community have been watching Amazon’s search for a second headquarters with bated breath. Today, Amazon announced its 20 finalist locations, which include Raleigh.
Here is the list of finalists: Atlanta; Austin; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland.; Nashville; Newark; New York; Northern Virginia; Philadelphia; Pittsburgh; Raleigh; Toronto; Washington, D.C.
Anyone who believes in the morality of a free market should view this announcement with a healthy dose of dread. Amazon was very clear in its Request for Proposals (RFP) that financial incentives from state and local governments will be “significant factors in the decision-making process.” With that announcement in the RFP, Amazon created a national bribing war among states and cities.
As an example, Chicago has offered Amazon $1.32 billion in tax credits. So, what will North Carolina have to offer?
In his first year in office, Governor Roy Cooper inked incentive deals totaling $185 million, according to the Raleigh News & Observer. Of course, that total pales in comparison to the $1.5 billion the Cooper administration offered for a failed bid to land a joint Toyota-Mazda automotive plant.
If Governor Cooper and Commerce Secretary Tony Copeland were willing to offer $1.5 billion in taxpayer dollars for 4,000 automotive workers in Randolph County, what will they offer Amazon for 50,000 jobs in Raleigh?
I agree that lower tax burdens are good for businesses and help create prosperity; however, these incentive programs only reduce the tax burden for select companies and keep the overall business tax rate artificially high. If across-the-board state government spending is not reduced by the amount of the incentives, then the corporate tax rate may have to increase for all North Carolina businesses. That is not fair tax policy and proves that incentives are simply welfare to politically-connected corporations.
If the Cooper administration wants to create jobs, then state government should continue to widen the tax base by eliminating incentive programs and cut overall tax rates instead of bribing companies to move to the Tar Heel State.