Bear with me here.
JLF president John Hood weighs in on the recent UNC Center for Competitive Economies study concluding that the state’s tax credit program had little measurable effect on business health and relocation decisions:
The available evidence suggests that North Carolina’s approach to tax incentives is wrongheaded. We impose a relatively high marginal tax rate on business profits and investment income, then give what amounts to rebates or discounts to select firms.
As a result, the shareholders and workers of some firms bear little incidence of state business taxes, while many others – typically smaller ones and those with longtime roots in North Carolina – bear a disproportionately high incidence.
Just last night I was catching up on the N&R’s interview with Asheboro businessman and Commerce Secretary Keith Crisco, who addressed that very issue, kinda. Even less settling — in my view — is Crisco’s response to a more direct question about tax credits as economic incentives:
….Q. Just before you came on the job, the Commerce Department approved $600,000 for an Atlanta-based startup with no existing operations on the promise that it could bring 1,000 jobs to Hickory. Would you have approved that deal?
A. “In hindsight, I wouldn’t have, but that’s not fair. … There is a risk associated with (recruiting companies). We won’t bat a thousand. If I spend four or eight years here and we have a lot of hits, I bet we’ll strike out one time. I bet we’ll be embarrassed one time. That’s not a reason not to do it.”
I understand the baseball analogy, yet I’m not comforted by those percentages. Hood notes that the pros who seek investment have had a hard time picking winners lately, so it stands to reason that “(p)ublic officials with little professional expertise or personal money on the line are highly unlikely to do any better, and will almost certainly do worse.”
So, while it’s true that even Alex Rodriguez and Albert Pujols strike out, what do we think will happen when the batboys come to the plate?
