The N&O has an editorial about Bob Orr’s incentive plan in which they basically conclude his heart is in the right place, but that the game may be too vicious not to play:
So some state aid would continue to flow. Would it be enough to entice a Dell Computer to pick North Carolina over Virginia? (Or Toyota to choose us over Mississippi?)
There’s the rub. The much-criticized incentives aren’t offered in a vacuum. In the real world that governors operate in, there’s cutthroat competition for major employers. Other states are as addicted to incentives as North Carolina is, or more so. Southern states are hungry.
And if incentives are controversial, not landing a big employer is too. Miss out too many times and the howls will be for the governor’s scalp.
But is there a way out of this trap? Is there a way to attract businesses long term? Of course: lower the corporate taxation rate relative to other Southern states. Currently, N.C. has the highest rate. If you can insure that the rate is lower (and that it will stay low), you can beat other states without playing the incentives game. You’ll offer long term assurances of a good business climate. And while some may huff and puff about corporations paying their "fair share", remind them that companies simply charge more, anyway, shifting the cost of taxes back to taxpayers.
-Max Borders
Great comment. People need to remember that corporations don’t pay taxes – people do.
A “corporation” as some independent entity can no more pay the corporate tax than your house can write the check for your property taxes.