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Published Jul. 5, 2009Views: 426
This story justifiably received more press coverage from WRAL than the July 4 Tea Party held yesterday in downtown Raleigh.
Despite a golden opportunity to capitalize on voter outrage over proposed tax increases, the GOP continues to fumble the ball in the budget debate. In an environment of rare unanimity amongst various splinter groups, the GOP appears to lack leadership capable of organizing opposition to Bev Perdue's $1.5 billion tax increase.
NC residents facing one of the highest state unemployment rates in the country cannot afford to wait for the next election cycle to experience renewed economic growth.
Due to cost pressures and reduced revenue, companies are shopping around for new low-cost facility locations within the United States. To reduce churn in labor markets, the Obama Administration is considering the introduction of a proposal to restrict state tax reductions and other business incentives in states that have received federal stimulus money.
In the absence of federal intervention, states with favorable tax climates are seizing key employers from states like North Carolina that are rushing to enact higher taxes.
Instead of capitalizing on the willingness of employers to relocate, Bev Perdue and House Democrats seem determined to drive North Carolina businesses to other states.
As major employers flee this state for greener pastures, Republican leaders are gravely mistaken if they believe that voters will reward incumbent candidates that limit their opposition solely to ineffectual block voting tactics.
Filed under: Government
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GOLO member since May 29, 2009
July 5, 2009 10:17 a.m.
That's a nice sentiment, but what exactly is the RIGHT thing for the states to do? I really don't see much difference between a state government interfering in its economy in an attempt to thwart the natural progress of capitalism or the federal government doing the same thing.
When jobs are scarce, state governments attempt to use taxpayer money to poach employers from other states, just like foreign governments do to poach employers from the US and send jobs overseas.
If NC entices a company from Tennessee, Tennessee gets one from South Carolina, and South Carolina gets one from NC, who wins? The stockholders from Belgium and South Africa and Korea. Who loses? We do.
Measures to prevent such self-destructive behavior may not pass some test of ideological purity, but I haven't heard any better ideas.
GOLO member since January 25, 2008
July 5, 2009 10:50 a.m.
NC history of tax breaks and such to big businesses to lure them to this state is in good times and bad, there has been no difference in the monies given to companies to locate here.
GOLO member since July 11, 2007
July 5, 2009 11:00 a.m.
As a rule, NC's government, like most, offers incentives for companies to locate where jobs are scarce, (bad times) not plentiful (good times). Is that absolute? Probably not. But that's not the point. Why are they doing it at all?
They are doing it because in an unfettered capitalist economy, some people are winners and some are losers. NC is taxing the winners in its state in order to subsidize the losers. When the federal government behaves this way, the screams of "socialism" from conservatives can be heard in China.
How is this different?
GOLO member since January 25, 2008
July 5, 2009 11:19 a.m.
How is this different?"
Never said it was. I think you misunderstood my initial post that you picked up and quoted.
GOLO member since July 11, 2007
July 5, 2009 11:21 a.m.
From rereading our post, I infer that you think it would have been all right for the feds to attach strings as long as they did it before handing out any money. That is, if they only realized AFTER TH FACT that states would find ways to circumvent the intent of the bill, they (that is to say, federal taxpayers from other states) deserve to lose because some states "played the game" better than theirs did.
As to the second point, do you think states should offer taxpayer funded incentives for businesses to relocate?
GOLO member since January 25, 2008
July 5, 2009 11:38 a.m.
GOLO member since January 25, 2008
July 5, 2009 11:42 a.m.
Engaging in academic discussion about hypothetical changes to federal rules will not stop businesses from leaving this state.
North Carolina can either exploit the situation or become roadkill for states like Texas, Wyoming, Florida, etc.
GOLO member since June 6, 2009
July 5, 2009 12:28 p.m.
As to the second point, do you think states should offer taxpayer funded incentives for businesses to relocate?"
As to the feds being involved in giving money to states to use as they please, no I don't like it because it's wide open for abuse and I don't want the feds mixing it up with states. I like a clear break between the two. Adding to a states slush fund (general budget) is dangerous territory.
As to whether I think states should offer incredible tax incentives to businesses to locate within their bounderies. No. However, once one state does it, others follow to compete
GOLO member since July 11, 2007
July 5, 2009 2:10 p.m.
So, who wins? The company, they write off any returned money and the state doesn't get the promised number of employees to get the full incentive package.
Whoever draws up these incentive deals doesn't protect the states interests well at all, further deteriorating the so called 'jobs' incentives we're sold by the state bodies.
GOLO member since July 11, 2007
July 5, 2009 2:13 p.m.
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