It's appropriate that the summer fishing season is here, because an unnamed industrial prospect is fishing for lucrative tax advantages and state lawmakers are taking the bait. And thanks to a compliant legislature that's quite willing to bite at anything as long as it might bring a few dozen jobs to the state, it's about to reel in millions of dollars in reduced taxes.
This foolishness has got to stop, but we have no confidence that will happen any time soon. With as many jobs as this state has lost in the last decade, and given how many other states are in the same zero-sum giveaway game of seeing how much taxpayer money they can dole out to attract companies to build facilities here, North Carolina is an enthusiastic player. “It's play or lose,” said state Sen. David Hoyle, D-Gaston.
State officials aren't saying who the tax incentive, approved by both chambers and up for a final vote Monday, is for, but it's a badly kept secret that Apple Computers is looking for a spot to build a large computer server farm on the East Coast to operate company services and house an applications store. Legislation approved by the House and Senate would require the company to invest as much as $1 billion in the facility, though it would not directly create all that many staff jobs. The company expects to employ about 50 workers, while as many as 250 contractors would find work. The cost to the N.C. treasury would be about $3 million in corporate taxes at first; after a few years, the cost might be $12.5 million a year.
It's genuinely troubling that at a time when Senate leaders have made an admirable effort to bring about real revenue reform that rids our antiquated tax code of loopholes and special treatment, they and other legislative leaders have also pushed for a tax revision drawn to benefit just one company.
We think Lincoln Republican Rep. Jonathan Rhyne has it right: “At least we know what our price is. It's a billion dollars,” he told the House the other day. “We're not going to look at our entire system and craft a tax policy that is good for everybody, but we sure will listen when one of the big boys comes in and says we want some special treatment.”
Yes, indeed we will. We've done it for so many companies in so many ways in recent years that we've lost count. We haven't, on the other hand, done the same sort of things for companies that have been here for years and paid their tax obligations without asking for a handout.
As long as the legislature continues to craft tax policy simply to attract a specific industrial prospect, the public will dismiss all that high-minded talk about devising a fair, transparent revenue system as just so much, well, apple-polishing.