Incentivize this
Submitted by James on Mon, 01/10/2011 - 12:14pm
One of the few things Art Pope and I agree on is the misguided practice of giving subsidies to private businesses in the form of incentives. I support the conservative view that government should not be picking the winners and losers when it comes to specific companies. And now it looks like that question is going back to the courts.
A North Carolina appeals court is taking a new look at a lawsuit arguing the millions taxpayers spent to get a culinary and hospitality school to move to Charlotte should be repaid. The Court of Appeals hears oral arguments on Monday in the case that seeks to claw back about $10 million in taxpayer money state legislators gave Johnson & Wales University in Charlotte.
A Wake County Superior Court judge last year dismissed the lawsuit by a conservative legal group, ruling the breaks served a legitimate public purpose of education and economic development. But the North Carolina Institute for Constitutional Law says the state constitution prohibits awarding special benefits to people or companies lawmakers pick out.
The proper response to the need to spur economic development is to eliminate corporate taxes completely, while simultaneously raising personal income taxes, especially on wealthy individuals, to offset the tax base.
Private businesses have entirely too many rights and privileges here in North Carolina, while shareholders and owners of those businesses have almost no liability for the damage their companies create. The answer to all of these challenges lies in eliminating the construct of "corporate personhood" in such a way as to give companies NO rights or privileges whatsoever.
More giveaways
This is one f*cked up way to run a country.
Do good. Be nice. Have fun.
Have you been to Charlotte lately?
J&W has clearly been a boon to downtown Charlotte. There are oodles of small restaurants cropping up all over the place, owned and staffed by J&W graduates.
And on the day Progress Energy informs Raleigh that it the city will be losing hundreds of well paying jobs over the next few years, it seems a bit shortsighted to reflexively condemn incentives that will keep a flagship corporation, a homegrown one, at home, and add hundreds of jobs averaging over $85,000 a year.
Sure, the fact that a state or a locality must compete with others is disheartening, but until there is federal legislation stopping it (and I'm not even sure how that would be legal) it is a fact of life.
Each of these situations needs to be judged on its own merits. Is it worth millions in incentives to recruit energy hogging server farms that don't really employ anybody? Probably not.
Would it have been worth it if Raleigh or Charlotte had won the worldwide headquarters of Boeing? You bet your bippy.
"Man is free at the moment he wishes to be." -Voltaire
Yes I have
and I am a big fan of J&W. May daughter spent at year at the Culinary Institute in New York. I know what kind of impact these institutions can have.
That said, I don't buy the incentives approach to economic development. It is an insult to fairness because it rewards the politically connected and puts governments in the position of being held hostage by businesses that already benefit from public services.
I advocate eliminating taxes on corporations (and rights of corporations) altogether. Only when "corporate personhood" is done away with will we have a democracy where people matter more than special business interests. In the meantime, you're advocating for a game in which the citizens of North Carolina are guaranteed losers over the long haul.
Do good. Be nice. Have fun.
My biggest problem with incentives
is the (sometimes) reckless way they're approached. Data centers are a good example, but so is Titan Cement. It's plain to me that Commerce wears blinders when recruiting and supporting businesses, which means the true cost/benefit ratio of incentives is left up to chance.
And thanks to the General Assembly's last-minute gutting of SEPA this previous Summer, the true costs of some of these initiatives are going to be even harder to determine.