by Brian Balfour
Senior Vice President of Research, John Locke Foundation
Elkay Manufacturing, a leading producer of sinks and water delivery products, will expand its operations in Robeson County, leading to the creation of 20 jobs, Governor Roy Cooper announced today. … A performance-based grant of $50,000 from the One North Carolina Fund will help facilitate Elkay’s expansion”
Of course, this release granting taxpayer funds to a specific corporation comes from the same Gov. Cooper who has for years publicly railed against “corporate tax giveaways.”
My colleague Jon Sanders wrote just last month that so far this year “Cooper has pledged $930.7 million to just 22 corporations.” This is on the heels of the more than half a billion in giveaways Cooper committed state taxpayers to last year. Of course, when Cooper states his opposition to “corporate tax giveaways,” he is lying. He loves such giveaways, but only if they are politically targeted and he can benefit by issuing press releases and attend ribbon-cutting ceremonies where he can brag about “creating jobs.”
Moreover, such taxpayer handouts to politically selected companies provide a competitive edge to the privileged recipients, meaning that winners and losers are influenced more and more by politics rather than consumer preferences. It concentrates more economic power into the hands of the few with political power and away from the many (us as consumers).
As a result, the use and allocation of the economy’s means of production are shaped increasingly by political preferences, rather than by the preferences of consumers. Such a system does not only create inferior economic results, it also creates a culture ripe for political corruption. With more and more financial favors being dispensed by politicians, the more pay to play corruption is invited and encouraged.
One way to strike a major blow to this culture of corruption and political favoritism is to eliminate the state’s corporate income tax, and in tandem end the game of targeted handouts. With no corporate tax liability, there’ll be no reason to grant corporations any handouts.