by Brenée Goforth
Communications Associate, John Locke Foundation
When Gov. Cooper vetoed the bipartisan state budget last year, one of the reasons he cited was the corporate tax break it included. Cooper is clearly not opposed to all corporate tax breaks, however, as JLF’s Jon Sanders illustrates in this week’s research brief chronicling the governor’s announcements over the past year.
How should the State of North Carolina go about corporate taxation and corporate welfare? There are four possible policy combinations.
Gov. Roy Cooper chooses the Central Planning & Cronyism combo. It’s an approach that combines high corporate taxes with high corporate welfare. That explains his seeming hypocrisy of doling out millions of dollars’ worth of incentives to corporations even as he vetoed the state budget for including a corporate tax cut (the outdated franchise tax, not the corporate income tax).
Among the list of those to receive incentives are: $12.3 million to Xerox, $1.2 million to Carvana, and – not one – but two grants for Microsoft, clocking in at $7.9 million and $12.1 million, respectively.
In total, Cooper pledged $146 million in grants to individual corporations while vetoing a reduction to the corporate franchise tax that would have allowed businesses in North Carolina, including small Mom & Pop shops, to retain an estimated $255.2 million…
The governor’s Central Planning & Cronyism program of trying to direct resources to certain corporations while taxing all the rest doesn’t help North Carolina. A policy of Freedom & Growth is the better path.