States are in a fierce bidding war to be the site of Amazon’s second North America headquarters, each trying to outdo the other in offering up millions in taxpayer-funded “incentives.” Our own Gov. Roy Cooper has joined this race to the bottom. If Amazon chooses North Carolina, the company will be in line to receive millions in economic development cash compliments of the state’s taxpayers.
It would hardly be the first time Cooper has used public funds to pick winners and losers in business. Since taking office, the governor has doled out more than $125 million in taxpayer dollars to hand-picked corporations like Credit Suisse.
These generous taxpayer subsidies rarely make economic sense. The $40.2 million awarded to Credit Suisse will produce only 1,200 new jobs — a price tag of $33,500 per job. Likewise, the $11.8 million given to insurance company AXA is slated to create only 550 jobs, or $21,455 per job.
It’s easy enough to spot the winners of this rigged game. Large corporations enjoy millions in handouts. Cooper can boast about all the jobs created while taking part in swanky ribbon-cutting ceremonies.
But away from the spotlight you will find the losers of corporate welfare: the small businesses struggling to stay afloat, the young entrepreneurs who can’t compete with established interests, and the taxpayers who are forced to pick up the tab.
A 2016 survey found that millennials launched about twice as many new companies as their parents did, and at younger ages. They have even bigger dreams for the future: A recent survey of small business owners in North Carolina and three other states found that 82 percent of millennials expect to grow their business in the next six to 12 months.
Fair competition is paramount to our young entrepreneurs. Growing a small business isn’t easy at any age, but it is even harder to succeed when your bigger competitors have secured special tax privileges from the government.
Corporate welfare enthusiasts like Cooper will always try to justify it as “creating jobs.” But as we’ve seen here in North Carolina, lowering and simplifying taxes for everybody does far more to create jobs than special handouts for the few.
Just look at the extraordinary progress our state has made in recent years. Since 2011, the General Assembly has lowered personal and corporate income tax rates, eliminated the estate tax and simplified other business taxes. This year, lawmakers overrode Cooper’s veto to enact even more tax cuts for North Carolinians, which will result in $476.4 million in savings for businesses over the next five years.
That’s the kind of success that makes companies flock to our state. It may even attract Amazon, which is looking to locate somewhere with a “stable and business-friendly environment” and the “potential to attract and retain strong technical talent.” Temporary tax breaks won’t produce that kind of business climate, but equitable pro-growth policies will.
Millennials have edged out the Boomers to become the largest generation in North Carolina, and their entrepreneurial drive will reshape our state in ways we can’t yet imagine. Our six-year track record of reducing taxes — one the greatest barriers to opportunity — is helping even more young people pursue their dreams.
However, the ambitions of the next generation are thwarted when Cooper rewards the well-connected at the expense of their competitors and taxpayers. It’s time to end these unfair handouts, because as experience has shown us, corporate welfare is a losing game.
Anna Beavon Gravely is the North Carolina state director of Generation Opportunity.