by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
There are still a few stray strands of ticker tape in the air celebrating North Carolina’s new tax system, but already Commerce Secretary Sharon “No, dig up!” Decker is desiring new taxes to fund corporate cronies.
As reported by The News & Observer today:
The administration of Gov. Pat McCrory is pushing a proposed tax on fracking as a substantial piece of its economic recovery strategy, with key Republicans saying it would raise millions for financial incentives to recruit companies or help them expand in North Carolina.
Commerce Secretary Sharon Decker said this week the state’s biggest competition in luring business is from Texas, where Gov. Rick Perry has what she called a “big slush fund,” financed by energy taxes, to spend on recruiting companies there. … Decker told the group she wants a similar piggy bank here and that “energy partners” are ready to “provide us with the money” in a climate where increasing traditional funding streams for incentives, such as income and corporate taxes, isn’t likely. She said the money would be used to lure major projects to the state.
“I’m very selfish – the governor gets tired of hearing it,” Decker told the group. “He says, ‘Lordy, mercy, you’re the greatest advocate for fracking I’ve ever seen.’ And I said it has nothing to do with fracking. I want those dollars in economic development.”
Follow the logic there. Decker wants fracking here not because it will create new jobs and drive new investment, but because it will, in the course of creating new jobs and driving new investment, also be a possible source of new taxation, the proceeds of which Decker can give away to her chosen “winners” and then claim credit for creating new jobs and driving investment.
And why? Because “traditional funding schemes for incentives, such as income and corporate taxes,” are lower — meaning Decker will have a harder time rewarding favorite corporate palsy-wals with super-special lower rates paid for by suckers hit with the higher rates.
Hey, but won’t those lower rates also create new jobs and drive new investment? Yes, but Decker can’t take credit for that. That’s just actual commerce, not looky-over-here-government-doing-stuff “commerce.”
“Lordy mercy” indeed.