The state of North Carolina levies differing forms of price regulations on a range of what would otherwise be free-market activities. These include controls on wages, gasoline, interest rates, and an unspecified number of prices during disasters and states of emergency. The purpose of this paper is to explain why a free and flexible price system is so important to both social order and the efficient allocation of goods, services, and resources in a free society. Particular emphasis will be placed on North Carolina’s laws meant to regulate prices and the negative effect that these regulations have on both markets and the well-being of the citizens of the state.
North Carolina utility consumers may face higher rates for no justifiable reason if extreme mercury regulations are adopted. The United States Environmental Protection Agency (EPA) is regulating, for the first time ever, mercury emissions from power plants. The purpose is to minimize potentially harmful mercury levels in fish consumed by humans. However, there has never been any documented case in the United States of mercury poisoning from fish. Data linking fish consumption to any type of adverse effect in humans is very weak. In addition, the EPA acknowledges that it does not know the impact mercury emissions from power plants have on the mercury levels in fish. Despite the lack of benefits and the additional costs, North Carolina’s Environmental Management Commission (EMC) is considering whether to adopt regulations which exceed the new and stringent federal standards.
North Carolina law limits the establishment and relocation of new-vehicle dealerships in “relevant market areas” where the same make of car is sold. This law was enacted due to the belief that dealers were in an unequal bargaining position with manufacturers. This rationale is now obsolete. Research also indicates that such laws hurt consumers. No justification exists to continue granting special privileges to dealers, especially when those privileges come at the expense of the public.
The NC House is considering a bill to raise the state’s minimum wage to $8.50 an hour. While intended to help lower-income workers earn a “living wage,” the more likely result is to boost the earnings of some non-poor workers, including many teens and seasonal workers, while increasing the unemployment rate for many poor and minority workers. Employers will not hire people whose work efforts are worth less in the market than a government-imposed wage. A better policy to boost the earnings of entry-level workers would be to address their educational deficiencies.
A House-Senate compromise budget for the 2003-05 biennium will cost North Carolina taxpayers another half-billion dollars a year and do little to stem the government’s long-term growth. General Fund spending will actually rise 3 percent in FY 2003-04 and 5 percent in FY 2004-05, with most of the increase over the next two fiscal years concentrated in health and human services, debt service, the UNC system, and subsidies to nonprofits. North Carolina deserves better.
The lengthy budget negotiations between House and Senate this year resulted in a compromise that gave the Senate its spending priorities this year and the House its tax cuts in future years. Overall, when accounted for correctly, the state General Fund budget will top $13.1 billion in FY 1998-99, representing an 11 percent increase from last year. Spending growth outweighs tax cuts in FY 1998-99 by a ratio of 25 to 1 — but the picture improves somewhat in the out years, when House-sought cuts in sales and inheritance taxes are phased in.
Homeownership is a vital component to a stable society and a thriving economy. It is a well-known presumption that owning a home gives an individual a stake in his or her society. For example, according to a recent study by scholars at the University of Chicago and Harvard University, homeowners are 10 percent more likely than renters to work to solve local problems. Another consideration is that homeownership is also the most common form of savings for the average working family. A home is typically the largest investment most families have.
By Jonathan C. Jordan and Michael Lowrey
posted February 28, 2001 by Michael Lowrey, John Hood
Like taxes, state and local regulations have an enormous impact on the average citizen as well as on businesses, especially small business — the key to job creation in a vibrant economy. In many ways, regulations are a more onerous and hidden way than taxes for the state to take resources out of the private sector to accomplish what is at least a purportedly public objective.
posted February 11, 2001 by Michael Lowrey, John Hood
One of the most common arguments in favor of a state lottery for North Carolina is that the Virginia Lottery attracts as much as $100 million in lottery ticket purchases from North Carolinians. But this revenue loss is exaggerated and dwarfed by the loss of revenue to out-of-state corporations that North Carolina would experience with a lottery. In reality, Virginia receives at most $34 million in state revenues from N.C. residents, while management fees paid out-of-state for operating a N.C. lottery would be at least $36 million.
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