Ending Corporate Welfare!
Our Founding Fathers embraced the free market capitalism of Adam Smith, and envisioned an America where business thrived through true competition in the marketplace. The American Dream is built on the premise that individuals, and groups of individuals, can obtain prosperity in the marketplace through innovation, hard work, and offering goods and services at a price that beats their competitors. Some, like Bernie Sanders, see the rise of crony capitalism as the inevitable conclusion of a flawed economic system. They would urge us to adopt socialism or even communism. I disagree. I truly believe we can return to the true free market capitalism that our Founders envisioned for North Carolina and for our country.
It shouldn’t be a surprise that the vast majority of Democrats support state-sponsored business. Such a model screams “Socialism” and “Sweden.” However, a great number of Republicans, who supposedly support free-market capitalism, seem to acquiesce to demands from business for corporate welfare. Perhaps they enjoy the contributions from business leaders to their campaign funds. Perhaps they just want to placate the public who are in need of good jobs quick. Whatever the reason – they acquiesce. Principles Matter!
- Why pay for a new factory or corporate headquarters when you can get the taxpayers to at least partially pay for it!? Business incentive grants are becoming more and more prevalent. Here in North Carolina we give $31 million annually to Hollywood film studios. Since Governor Cooper has been in office, he has spent 100’s of millions of dollars of your money on corporate giveaways. Make no mistake – these are not loans or investments. When you invest in something you expect to not only get your money back if the company does well, but actually make a profit. These incentive grants are NEVER repaid. Furthermore, the grant programs are set up in such a way that only the large and favored corporations can take advantage of them. The minimum size of the project is usually set in the billions, so no local company can actually utilize these grant programs.
- Not only is our government playing favorites in the marketplace when they make these grants, but its hurting individual citizens. Most citizens are employed by smaller companies. However, if competition is eliminated or stifled, then these companies won’t do as well as they should. This effects the bottom line. So instead of being able to reward good employees with the salary increases and bonuses that they deserve, employers have no choice but to offer lower wages just to stay in business at all. Corporate welfare also negatively affects consumers. If no competition exists, monopolies can charge higher prices, with no fear that they will lose market share.
- When we give into demands for corporate welfare, we are really giving into extortion. Large corporations will play one State against another, and will threaten to relocate every few years, unless their new and larger demands are met. This is an unsustainable process.
What Would I Do About It
I would eliminate the NC Film Office, and the Film & Entertainment Grant Program. We are currently funding over $30 million in grants annually through this program. While it provides some temporary jobs for film workers, the economic impact of these grants has been determined to be negligible. Let’s get that money back to the local communities so they can make the types of infrastructure improvements that will attract all kinds of new businesses to come to North Carolina.
I would eliminate the competitive incentives program run by the NC Department of Commerce. This includes the Job Development Investment Grant (JDIG) and the One North Carolina Fund. These programs are flush with 100’s of millions of dollars that could be better used to improve infrastructure or to return to the taxpayers.
As part of my program to eliminate the State Income Tax, the state Corporate Income Tax would also be eliminated. This will attract all types of new business to North Carolina.