Supporters of the Senate’s billion-dollar-a-year tax cut proposal gave North Carolinians an earful last week about the need to improve our state’s “business climate.” Unfortunately, their comments in the debate on the tax plan reflected a measure of business climate based on a misleading and incomplete index manufactured by an organization dedicated to cutting all taxes, all the time and justifying it no matter what the facts might be.
Like many indices that claim to assess and compare states’ ability to compete for business investment, the Tax Foundation’s approach focuses entirely on taxes even though a range of other policies are crucial for meeting the needs of business, creating jobs, and building a strong economy. So it’s no surprise that the results bear little resemblance to reality.
So here are three reasons that the Tax Foundation rankings are the wrong foundation for making tax policy in North Carolina:
1. They focus exclusively on cherry-picked tax policies the Tax Foundation just doesn’t like, rather than on the whole range of factors that genuinely drive business investment decisions.