http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/corporate-welfare Letter to the Editor According to your July 18 story, Honda announced that it is locating its jet engine headquarters in Burlington and will provide "as many as" 70 jobs paying an average salary of $62,000. Unfortunately, each of those jobs will cost taxpayers a whopping $182,000. Here's how the numbers break down: The state is giving Honda $1.7 million in grant money from its Job Development Investment Grants (JDIG) program. The Airport Authority in Alamance County has taken out a loan for $11 million to make its airport suitable for Honda's needs. So, taxpayers are handing Honda $12.7 million for 70 jobs, which comes to approximately $182,000 per job. And this doesn't include interest on the $11 million loan. Now, I'm no expert on economic development, but I'm pretty sure using $182,000 to create one job is not the best way to facilitate a healthy job market in North Carolina. Sounds more like corporate welfare to me. Rob Thompson Policy Advocate, N.C. Public Interest Research Group Raleigh http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/corporate-welfare Wed, 12 Sep 2007 16:43:00 -0500 http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/companies-getting-tax-breaks-should-be-held-accountable By Shana Becker Whatever our perspective on taxes -- from feeding bureaucracy to funding public services -- there are some basic principles upon which North Carolinians across the political spectrum agree. North Carolina's taxes and budget should be accountable, transparent, and encourage good business practices. To further these basic principles, North Carolina should adopt three common-sense reforms. First, tax giveaways -- subsidies and tax exemptions -- should be subject to greater public accountability. Once in the tax code, special tax breaks, such as the $242 million offered to Dell in exchange for attracting more jobs, require no annual approval, no review and no proof that the companies are living up to their end of the bargain. North Carolina's bid for Dell's computer plant exceeded the other competing bid by $205 million. And, instead of generating revenue, the deal could end up costing the public tens of millions of additional dollars over the next 20 years. We should take a page from the legislative book of Illinois and Minnesota. There, if recipients of tax breaks fail to deliver on their promises, the states can recover their money. Aggressively pursuing these policies in North Carolina, including transparent reporting of subsidies and annual progress reports on the bargained-for benefits, would go a long way toward restoring public confidence in corporations and taxes. Second, the General Assembly should place greater controls on "earmark" spending. "Earmark" spending, a.k.a. pork-barrel spending, occurs when legislators single out particular projects for public funds outside of any existing program in the budget. To increase accountability, the General Assembly should require lawmakers to attach their names to individual earmark spending items, and publish the list online. These simple rules would make the budget process more transparent and discourage elected officials from pushing for spending they can't defend publicly. Lastly, companies in North Carolina should thrive based on their efficiency and capacity for innovation, not the ability of their lawyers to find tax loopholes. This problem is particularly severe when companies that operate in multiple states shift money between subsidiaries as a way to avoid taxes, leaving in-state companies at a competitive disadvantage. For instance, Wal-Mart used a wholly owned subsidiary to disguise the fact that it was paying rent to itself, and then deducted the rent from its North Carolina taxable income. Twenty states have found a simple way to discourage this hide-and-seek without forcing tax authorities to comb through transactions between subsidiaries: combined reporting. This reform requires companies and their subsidiaries to file a joint tax report and pay taxes on their combined profits based on their in-state activity. This year, Governor Easley joined five other governors in proposing to adopt this tax modernization. Bills have been introduced in both the House and the Senate. North Carolinians agree on some basic, non-partisan, tax principles. We value transparency, accountability, and fairness. This April, tell your legislators to hold companies that get state subsidies accountable for their end of the bargain, make "earmark" spending transparent, and implement combined reporting to encourage fair business practices. (Find your legislators at http://www.ncleg.net.) Doing so will make next April 15 more palatable. http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/companies-getting-tax-breaks-should-be-held-accountable Wed, 12 Sep 2007 16:51:06 -0500 http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/speedway-incentives-questioned Speedway incentives questioned http://www.ncpirg.org/in-the-news/tax--budget-policy/tax--budget-policy-in-the-news/speedway-incentives-questioned Fri, 30 Nov 2007 09:57:02 -0600