North Carolina: A state in decline

[myDeaconmyhand]

There is a big difference between giving a company something funded by taxpayers and giving a tax break to the company to keep more of its own money.

Not this shit again. The States budget is funded with Tax money and federal tax money, so when that tax break is given the State is giving something away-future tax income. To argue otherwise is to argue that tax legislation should only be applied to people and businesses who support the tax, which subsequently just defeats the purpose of democratic governance.

 

[ThinkingWithMyDeac]

I love the well they shouldn't of done that attitude that people have, i.e Peach. Once the act has happened there is no undoing the child that requires cares and education and shelter etc... So you scenario never plays out because its not reality.

 

[scooter84]

as long as all companies and individuals have access to the same tax breaks, sure. But as you well know, what actually happens is "job creator" comes in and demands freedom from property taxes for 10 years in exchange for creating jobs (i.e., moving them from some other state or locality that won't play ball), or some similar deal. Local business owners don't get that deal, and neither do companies who have quietly grown and grown organically while paying local taxes for years. There is no way to spin that into anything other than spending taxpayer money backended through the tax code so the sheeple don't see the true cost.

I agree some of the incentive packages have gotten out of control - it is kind of like competition between professional sports teams driving player salaries sky high, causing them to raise ticket prices, etc... States are competing for these companies and upping the ante on incentive packages to the point where they are ridiculous.

But, the theory makes sense - give the company tax incentives for the first few years to get them here and then the state (and its taxpayers) comes out way ahead in the long run through the taxes the company will be paying forever.

 

[DeaconPeach]

A lot can happen in 9 months, 2 years, 5 years, 18 years. I guess adoption agencies should be next door to the unemployment line.

I'm speaking more to my original comment about families where the third generation is growing up never having lived without full governmental support, not for someone with children who had been gainfully employed but lost their job during the recession. In my original scenario, people are having and continuing to have kids without ever having a way of supporting them to begin with.

 

[PhDeac]

And I'll go back to my original point that the best way to break those generational trends is to educate the next generation as soon as possible and diminish the negative influences of the parents. Sadly, a good Pre-K education is demonized as a government handout.

 

[BeachBumDeac]

But, the theory makes sense - give the company tax incentives for the first few years to get them here and then the state (and its taxpayers) comes out way ahead in the long run through the taxes the company will be paying forever.

Not really, because the company will just move those jobs to another state once the tax incentives have expired.

 

[DG3]

Solution: No one with an IQ under 80 can have kids.

 

[bym051d]

If the parent couldn't afford another mouth to feed, perhaps they should have used birth control, abstained from sex, or given the child up for adoption. Unpopular opinion I know, but a realistic one.

FWIW, I oppose the federal government giving handouts to anyone, including corporations of any kind (including banks, auto companies errr unions, etc.).

That's a fantastic idea in retrospect. What about the kids after their born? "I know you're hungry, but your parents should've abstained."

 

[scooter84]

Not really, because the company will just move those jobs to another state once the tax incentives have expired.

Is there really history of companies doing this? Moving operations is very expensive and very disruptive to a business - I find it hard to believe that it would really be worth it for a company to do this...

Many of these incentive packages are tied to certain numbers of jobs created, etc. Many companies never reach the stated numbers and thus never collect on the incentives. So, it is sometimes the case that a big incentive package gets announced "Company xxx has reached a deal with State YYY to establish a new HQ there in exchange for $zzz million dollars in tax incentives". And people get all up in arms about it... But the tax incentives either never happen or happen to a much smaller extent because the company never reaches the milestones needed to trigger them.

 

[DeaconBrews]

Solution: No one with an IQ under 80 can have kids.

 

[Deacon923]

I agree some of the incentive packages have gotten out of control - it is kind of like competition between professional sports teams driving player salaries sky high, causing them to raise ticket prices, etc... States are competing for these companies and upping the ante on incentive packages to the point where they are ridiculous.

But, the theory makes sense - give the company tax incentives for the first few years to get them here and then the state (and its taxpayers) comes out way ahead in the long run through the taxes the company will be paying forever.

Even if that is true (and I personally believe that an all in cost ROI analysis would usually show that the state gets a negative to very low ROI), it's still a classic tragedy of the commons situation. These companies want to build a plant and hire people because they've already determined there's enough demand to justify that investment. The taxpayer subsidies are not the cause of the business decision, it's a bribe to get them to put the investment one place vs. another, and it's almost always a competition between states, not between NC and China or NC and Canada. Thus when you look at it on a national level, there is zero net job or tax gain for the taxpayer dollar being spent.

 

[Baconwfu]

Not really, because the company will just move those jobs to another state once the tax incentives have expired.

Depends, how expensive is it for the company to move?
The idea is to get companies to come and take root in your community. There are only so many tax breaks a municipality can offer, it's also expensive for companies to move jobs.
I'm not one for ridiculous incentives personally, if you offer incentives it should be for good companies that bring in educated, highly skilled labor (educated highly skilled labor forces are harder to move), but it makes sense for municipalities to offer incentives intelligently

 

[HeltonCreek]

If the parent couldn't afford another mouth to feed, perhaps they should have used birth control, abstained from sex, or given the child up for adoption. Unpopular opinion I know, but a realistic one.

FWIW, I oppose the federal government giving handouts to anyone, including corporations of any kind (including banks, auto companies errr unions, etc.).

But the same folks who oppose spending on social programs also oppose free birth control and sex education which could reduce dependency on welfare.

 

[Baconwfu]

Even if that is true (and I personally believe that an all in cost ROI analysis would usually show that the state gets a negative to very low ROI), it's still a classic tragedy of the commons situation. These companies want to build a plant and hire people because they've already determined there's enough demand to justify that investment. The taxpayer subsidies are not the cause of the business decision, it's a bribe to get them to put the investment one place vs. another, and it's almost always a competition between states, not between NC and China or NC and Canada. Thus when you look at it on a national level, there is zero net job or tax gain for the taxpayer dollar being spent.

It's just like a company getting into a price war with it's competition. Generally it's not going to work out well for anyone, so typically the better company finds a way to separate itself from the other based on things other than price.....thus a municipality should find a way to attract companies other than purely with $$

 

[Deacon923]

Is there really history of companies doing this? Moving operations is very expensive and very disruptive to a business - I find it hard to believe that it would really be worth it for a company to do this...

Many of these incentive packages are tied to certain numbers of jobs created, etc. Many companies never reach the stated numbers and thus never collect on the incentives. So, it is sometimes the case that a big incentive package gets announced "Company xxx has reached a deal with State YYY to establish a new HQ there in exchange for $zzz million dollars in tax incentives". And people get all up in arms about it... But the tax incentives either never happen or happen to a much smaller extent because the company never reaches the milestones needed to trigger them.

it's not good enough to just say tax incentives equal jobs, and jobs are good, full stop. The taxpayer is being asked to invest in a business. When you invest in a business, you expect a reasonable ROI, and the riskier the business, the higher the ROI you demand. Our elected leaders pretend that jobs = ROI. Well they don't always, especially if they are low wage jobs that don't pay much income tax, and especially if the company has a good tax department that knows how to avoid or minimize state level taxes.

 

[BeachBumDeac]

Is there really history of companies doing this? Moving operations is very expensive and very disruptive to a business - I find it hard to believe that it would really be worth it for a company to do this...

Many of these incentive packages are tied to certain numbers of jobs created, etc. Many companies never reach the stated numbers and thus never collect on the incentives. So, it is sometimes the case that a big incentive package gets announced "Company xxx has reached a deal with State YYY to establish a new HQ there in exchange for $zzz million dollars in tax incentives". And people get all up in arms about it... But the tax incentives either never happen or happen to a much smaller extent because the company never reaches the milestones needed to trigger them.

As we move to a service based (rather than manufacturing based) economy, it becomes a LOT easier for companies to move around.

 

[scooter84]

it's not good enough to just say tax incentives equal jobs, and jobs are good, full stop. The taxpayer is being asked to invest in a business. When you invest in a business, you expect a reasonable ROI, and the riskier the business, the higher the ROI you demand. Our elected leaders pretend that jobs = ROI. Well they don't always, especially if they are low wage jobs that don't pay much income tax, and especially if the company has a good tax department that knows how to avoid or minimize state level taxes.

This is just saying that you need to be smart about the incentives you offer and to whom you offer them. Of course you need to be smart about it - whether governments actually ARE smart about it is another question.

 

[mattwfu99]

As we move to a service based (rather than manufacturing based) economy, it becomes a LOT easier for companies to move around.

Service based jobs generally are not the companies being offered incentives packages.

And to not calculate the impact of the jobs for the people who get them as part of the ROI doesn't make sense. Tell the 500 people able to get jobs at a distribution facility that the lost state income tax for 10 years wasn't worth it. Even "low paying" jobs have to average out to a county average wage to qualify for incentives.

 

[NoVaDeac]

If the parent couldn't afford another mouth to feed, perhaps they should have used birth control, abstained from sex, or given the child up for adoption. Unpopular opinion I know, but a realistic one.

FWIW, I oppose the federal government giving handouts to anyone, including corporations of any kind (including banks, auto companies errr unions, etc.).

Perhaps an abortion?

This is not a signature

 

[ChrisL68]

The Pubs had a good chance to make some meaningful and positive reforms to tax policy. But they have gotten bogged down in partisan issues BS.

Should have gone to 100% sales apportionment, lowered the corporate rate and made the franchise tax simpler and less of a component of corporate taxes. All are favorable to companies that actually have operations in NC.