The Tax Foundation, perhaps the nation's leading tax research group, recently shredded North Carolina's desperate and unfair tax break given to Apple Computers.
As Tax Foundation President Scott Hodge said:
"North Carolina ranks 37th in the nation when it comes to the
'business-friendliness' of their tax code in the Tax Foundation's State Business Tax Climate Index,
a measure of how each state's tax laws affect economic performance. They rank
last in the region, behind West Virginia, Virginia, Kentucky, Tennessee, South
Carolina and Georgia. And lawmakers need to understand that their state is not
only competing with other states for economic investment; they're also competing
in a global marketplace.
"The targeted tax incentives passed by the North Carolina legislature earlier
this week might have the good intention of attempting to bring investment and
economic growth to the Tar Heel State. But these packages send unintended
signals to the marketplace. First, it tells the market that your tax system is
so out of line that you need specific tax breaks to get a business to locate in
the state. Second, it tells your local businesses that they are foolish for
staying in the state and paying taxes to subsidize another business with better
"Too many legislators confuse targeted business incentives with policies that
truly create a better business climate. They are not. They only provide an
excuse for lawmakers to avoid real tax reform. Targeted incentives are to a
state's economy what steroids are to the human body—short-term results that
eventually weaken the bones, cause heart failure, or worse, impotency.
"Tax systems should not be used to pick winners and losers or micromanage the
economy. Data farms in North Carolina might be a good thing, but it is much
better for the marketplace to decide that, not government. The key to a
prosperous economy is a tax system that provides a level playing field for all
businesses and all industries."