Throughout the tax reform debate, we’ve been hearing a lot about the importance of improving North Carolina’s economic competitiveness as a route to bringing down the state’s exceptionally high unemployment rate. With the jobless rate stuck near 9 percent, unemployment is clearly a central policy challenge facing our state’s lawmakers. But lawmakers are getting it wrong when they assume that North Carolina’s unemployment is the result of poor economic competitiveness relative to other states. And it’s certainly no reason to support deep tax cuts like those embodied in all of the proposals put forward by the House and Senate.
The plain truth is that North Carolina is already competitive in attracting and growing businesses in the state. In fact, the CEOs and consultants who make corporate location decisions have repeatedly ranked North Carolina near the top of the nation for its business climate and attractiveness to investment in survey after survey. The U.S. Chamber’s own Enterprising States ranking puts North Carolina 12th for innovation and entrepreneurship.
The results are plain to see: North Carolina’s economy compares pretty favorably to our neighboring states (all of which have lower tax rates). Our state is leading or in the middle of the pack in nearly every major indicator of economic competitiveness—poverty, household income, and even annual per capita economic growth.