RALEIGH – Roy Cooper traveled the Old North State in 2016 decrying McCrory’s ‘corporate cash giveaways’ and slamming Republicans in the legislature for having the gall to let businesses in the state keep more of their money.
It was tantamount to corporate welfare, he said. It takes money from school teachers and kids in the classroom, he whined.
From his 2016 campaign website:
“While some of the biggest companies, including out-of-state corporations, have received tremendous giveaways, many of our small businesses and working families have seen tax increases, sometimes disguised as fees,” he said, according to a statement on the site.”
Now, after only one year in office, Cooper’s administration has promised approximately $185 million in incentives to corporations from all around, dwarfing McCrory’s annual totals and making him one of the largest hypocrites around.
The totals, and a dive into corporate incentives more generally, were highlighted in the N&O, a Leftist outfit that would surely be screaming class warfare talking points if these totals had accumulated within the first year of a Republican governor’s term.
And this $185 million figure isn’t even counting the possibility of Amazon HQ2, or a Toyota/Mazda manufacturing plant that the N.C. Department of Commerce is ‘competing’ for. Those incentives would mean billions in taxpayer dollars to lure big, fat, ribbon cutting ceremonies.
“Cooper said in a December interview that incentives aren’t a giveaway, noting they are tied to capital investment and job creation. No company gets tax credits if it doesn’t meet specific criteria.
“We can make targeted, accountable incentives for the creation of jobs. This makes sure that the incentives that you give to companies directly result in good-paying jobs for our people,” he said. “And that’s a lot different than just across-the-board giveaways to corporations and the wealthy at the expense of education and tax cuts for the middle class, particularly with no guarantee that they’ll bring good-paying jobs to our state.”
[…] in a year when the state struck deals to potentially grant as much as $185 million in incentives to 54 companies if they meet the state’s criteria for creating jobs and investing in infrastructure.
A large chunk will go to Triangle Tyre, which Cooper announced on Dec. 19 will receive more than $66 million from the state and $86 million from Edgecombe County to open a manufacturing plant in Kingsboro and create 800 jobs over the next five years. The company said the incentives package, worth a total of $152 million, was crucial in its decision.
In total, the 54 companies have committed to invest $2.85 billion and create 12,637 jobs in the state over the next three to 12 years, according to David Rhoades, spokesman for the N.C. Department of Commerce.
That’s an increase from 2016, when the state granted companies up to $66.9 million if they fulfill promises to invest nearly $1.39 billion and create 7,300 jobs.”
Yes, lowering corporate tax rates for businesses – small, medium, and large – that operate in North Carolina are ‘evil cash giveaways,’ but Cooper’s targeted tax credits in which the state government picks winners and makes everyone else losers is not. Right.
Even if these incentives did ‘create’ jobs, what gives politicians the right to use my tax dollar to bribe companies to give a job to my neighbor?
Even squishy Republicans are keen to point out the difference in approaches, though, admittedly, they have been just as interested in giving away your money for the chance of a politically beneficial ribbon-cutting.
“State Rep. Jason Saine says Cooper’s claims about tax cuts are misleading. Cutting the corporate tax rate allows businesses to keep money that’s “already theirs,” he said.
“Gov. Cooper believes in giving tax breaks to massive out-of-state corporations when it will lead to a photo op, but not to small and medium-sized, home-grown business that are the backbone of our economy,” Saine said. “We’re not giving any money away with tax reform; we’re simply lowering the burden of government on already stretched pocketbooks.””
That’s exactly right. Lowering tax rates is merely agreeing to steal less from people and their businesses. Corporate incentives, on the other hand, necessarily divert taxpayer funds to favor select companies.
The latter shouldn’t be done under Democrats or Republicans because it is not the government’s role or right to play venture capitalist with other people’s money (that is taken by force).
Plus, for all the hoopla about how many jobs these politicians are bringing to the state with such generous packages, incentives are understood by economists to have a no positive effects on economic growth in the end.
“A 2015 review of incentives by WRAL found that, for incentive projects announced from 2009 to 2012 (when Democrat Bev Perdue was governor) most of the jobs had failed to materialize.
Nathan Jensen, a professor at the University of Texas and founder of the Economic Development Incentive Evaluation Project, says many incentives deals are unnecessary.
“This means that they are being offered to companies that were going to invest even without the incentives and thus they are a subsidy for firms with no impact,” Jensen said in an email.
Corporate tax cuts, meanwhile, consistently yield results, said Mike Walden, professor and N.C. Cooperative Extension economist at N.C. State University.
“There is much literature to support the idea that lowering the state corporate tax rate does have a positive impact on state-level economic growth,” Walden said. “I think this is because the corporate tax rate is one that directly impacts a corporation’s ‘bottom line.’ ””
Anyone with a semblance of common sense could gather that a lower overall tax environment is better for overall economic growth than a game of crony incentives.
Read more on Cooper’s hypocrisy and the general discussion on incentives here.