Berger: Real Tax Reform Will Create Jobs

Government Spending and Targeted Tax Incentives A Failed Policy

Raleigh, N.C. – The final joint meeting of the House and Senate Finance Committees studying tax reform wrapped up Tuesday with a presentation by Brent Lane, Director of the UNC Center for Competitive Economies, who discussed the recent history of tax policy in North Carolina and its effect on the state’s business climate.  From 2000-2009, North Carolina’s labor force increased by 329,012 workers; during the same period, the state’s economy added only 13,806 jobs—a shortfall of 315,206 jobs.  Further, wages in North Carolina fall significantly below the national average.  Since 1997, when North Carolina first adopted incentives targeted at certain companies aimed at luring them to the state, per capita income in North Carolina has declined from 93 percent of the national average to 88 percent of the national average.  Additionally, a new study from the Small Business & Entrepreneurship Council says North Carolina has the fifteenth worst tax environments for small businesses in the country and the worst in the South.  (“Study slams N.C. on tax environment,” Charlotte Business Journal, 4/28/10)

Senate Republican Leader Phil Berger (R-Rockingham) made the following statement:

“North Carolina’s tax system discourages business growth and job creation.  High tax rates and a thirteen year experiment with targeted tax incentives to companies handpicked by state government insiders have been a complete failure.  We know that high tax rates are the consequence of state government spending.  We also know that high taxes discourage job creation.  Yet at a time when unemployment in North Carolina is stuck in double digits, Governor Perdue proposed a budget that actually increases spending by more than half a billion dollars.  Unfortunately, state Democrats are committed to continuing failed policies that stall job growth and discourage businesses from coming to our state.”

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