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NC Budget and Tax Center

It is becoming ever clearer that recent tax cuts have not endeared North Carolina to the entire business community. Proponents of the 2013 tax cuts argued that they would create a more competitive and business-friendly climate. Looking at recent business climate rankings, however, undermines this argument in two key ways.

First, multinational corporations already liked North Carolina just fine before the latest tax cuts. Second, the tax cuts have undermined our economic competitiveness in other important areas.

The 2014 Top Competitive States ranking by Site Selection, in which North Carolina is ranked #1, suggests that the tax cuts worked. However, North Carolina has consistently been at or near the top of the Site Selection rankings for a decade, including being #1 in some years prior to the 2013 round of tax changes. This ranking is largely based on the level of private capital investment a state secures, the number of jobs created, and a state’s tax climate – as determined by the conservative Tax Foundation. Essentially, low tax rates and high levels of capital investments – made possible in part due to generous economic incentives provided to corporations by state governments – benefits a state’s performance in this ranking. Read More

Commentary

equality overtonThe growing disconnect between the last gaspers in the far right anti-equality movement and the modern global business community is on full display this week.

Today, Raleigh’s News & Observer ran an editorial by Apple CEO Tim Cook that appeared in yesterday’s Washington Post in which Cook blasted the nation’s soon-to-dissipate wave of state discrimination laws masquerading under the banner “religious freedom.”

Here’s Cook:

“America’s business community recognized a long time ago that discrimination, in all its forms, is bad for business. At Apple, we are in business to empower and enrich our customers’ lives. We strive to do business in a way that is just and fair. That’s why, on behalf of Apple, I’m standing up to oppose this new wave of legislation – wherever it emerges. I’m writing in the hopes that many more will join this movement. From North Carolina to Nevada, these bills under consideration truly will hurt jobs, growth and the economic vibrancy of parts of the country where a 21st-century economy was once welcomed with open arms.”

The message from Cook, head of one of the nation’s largest and most profitable companies, couldn’t be much clearer: “North Carolina: get you act together or be left behind even further than you already are.”

Happily, Gov. Pat McCrory seemed to echo Cook when he told an interviewer the bill “makes no sense” and similarly criticized the state Senate’s silly proposal to exempt magistrates from doing their duty to marry all couples who lawfully present themselves for marriage.

One word that was notably absent from the Guv’s statements on the issue thus far (at least in the reports I’ve seen) was “veto.” Let’s hope this was just an oversight and not another example of McCrory’s frustrating tendency to pontificate against controversial ideas and let them become law without his signature. If McCrory really wants to act like a leader on this matter, he should get out in front and nip it in the bud by sending a strong message to the members the General Assembly.

Commentary

Be sure to check out the newest lead stories on the main NCPW site today:

This morning, N.C. Justice Center Communication Director Jeff Shaw authored a personal and exceedingly rational commentary on the latest outbreak of gun madness in our gun-obsessed culture (which even discusses his own personal experience growing up with firearms).

Meanwhile, in this afternoon’s “lead,” Chris Fitzsimon dissects the misleading claims of a conservative national group with an innocuous-sounding name (i.e. the Tax Foundation) about North Carolina’s “business climate.” As Chris notes:

“It’s not an analysis of how our state is doing at all.

It has little to do with the economy and isn’t even an accurate picture of the taxes businesses and individuals actually pay. And it ignores a long list of factors that business leaders rely on when making their decision about where to locate, from transportation to workforce readiness to quality of life for employees.

The Tax Foundation ranking isn’t any way to evaluate the decisions our leaders have made. It’s a flawed mechanism designed to reinforce an ideological agenda. And it ought to be reported with a little more context.”

Bonus story: Check out yesterday’s “Progressive Voices” entry from NCPW contributor Chavi Koneru about the fast-growing Asian American vote and the perplexing failure of politicians to cultivate it — even in closely-divided states like North Carolina.

Uncategorized

The market capitalism lovers at Forbes announced today for the fifth time in eight years that the Raleigh metro area is the nation’s best for business and careers. Here are the factors highlighted first in the story

Fueling Raleigh’s consistent results are business costs that are 18% below the national average, and an adult population where 42% have a college degree, the 12th best rate in the U.S. (30% is the national average). Raleigh is home to North Carolina State University and nearby schools include Duke University and the University of North Carolina at Chapel Hill. The area’s appeal has led to a strong inflow of new residents to the city, which boasts the sixth fastest net migration rate over the past five years. (Emphasis supplied.)

Perhaps the Forbes people could share this information with their fellow travelers over at the Raleigh-based Pope Center for Higher Education, which has been banging the drum for years that — we are not making this up — North Carolina has too many college students and graduates and the value of higher education has been “oversold.”

NC Budget and Tax Center

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.

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