Undaunted by the failed Dell corporate welfare giveaway in Winston-Salem, local and state politicians once again use taxpayer dollars to centrally-plan the economy, by bribing Herbalife to relocate into the very same plant vacated by Dell.
In exchange for millions of taxpayer dollars and anti-competitive political privilege, Herbalife pledges to create nearly 500 jobs hire away nearly 500 workers from their current jobs and distort the local labor market while not improving area employment on net. This deal amounts to a very expensive ribbon-cutting ceremony:
The N.C. Commerce Department said Herbalife has been made eligible for up to $5.55 million from the Job Development Investment Grant program and up to $1 million from the One North Carolina Fund. The company already has been made eligible for a combined $3.44 million in local incentives.
But wait…there’s more:
In November 2011, a commercial business court in Belgium ruled that Herbalife was in breach of market practices and consumer protection regulations because “it has established, managed or promoted a pyramid scheme, whereby the consumer or a business stands to make money which is more likely the result of introducing new consumers or businesses into the scheme than from the sale or use of products.”
It’s bad enough the federal government has forced us all to participate in the world’s biggest ponzi scheme (social security) which is hopelessly bankrupt, now local and state politicians are forcing North Carolinians to subsidize this ponzi scheme.
A question for those local and state officials who made this deal: if this is such a great investment, how much of your own money have you invested in this company?
Lastly, seeing politicians stoop yet again to bribing a company to locate in NC provides further evidence that our current tax structure is horribly unfriendly to investment and entrepreneurship. Otherwise, why would we need to bribe them?
Instead of randomly bribing select companies to locate here, NC should consider the ultimate economic incentive: http://noincometaxnc.org/
Corporate welfare schemes of which this is one ultimately pick winners and losers. Lowering the corporate tax rate to make NC more competive makes more sense in the long run. Businesses should pick NC because they desire thrive in a friendly business environment, not because some local govenrment business deveopment functionary enticed them with taxpayer dollars to add to the business infrastructure of NC.