Wednesday, August 24, 2005

The favored few

NC, like many other states, has adopted the "state knows best" approach by offering economic incentives to select companies. Politicians like these incentives as they offer photo-ops, job "creation" and an excuse for the politician to take taxpayer money and give it to a targeted (and potential campaign contributor) group.

But the schemes suggest that the state has the wisdom to decide which businesses will succeed, something the state has never really proven adept at doing. Instead, we have suggested here before that NC would be better off lowering taxes for all businesses in order to attract jobs.

Another pitfall of the incentive approach was just revealed as computer maker Lenovo is demanding an economic incentive to stay in NC. And why not? If the state can shower money on Dell to build here, why shouldn't companies here demand the same favors? Maybe the Democrats who run the state will find a slush fund with some money for Lenovo and hold a nice photo op and convince the fools in Durham to vote for them again. But eventually the shell game must end, and hopefully enough companies and individuals demand tax breaks so that we can elect representatives unwilling to pass the tax increases we just saw passed here.