Archive for September, 2007

Tilting at the right windmill

Friday, September 28th, 2007

On a recent Tuesday earlier this month, the North Carolina legislature — which had gathered in Raleigh for a special session solely for this purpose — voted to give two huge corporations $60 million in incentives to ensure that their industrial facilities wouldn’t be relocated to another state. It was the legislative equivalent to a homely girl paying the handsome jock to occasionally take her out on a date: pitiful, needy and utterly lacking in self-esteem.

A couple of days after that vote, I came across a news article about how the founders of Google had worked out a deal to park their personal private jet at a federally operated airstrip just minutes from their headquarters in Mountain View, California. The airstrip is normally closed to private use, and other Silicon Valley tycoons have to fight traffic to get to their jets at faraway airports. But the Google boys threw a little money at the feds to clinch the deal. God knows they’ve got it to toss around. The two founders of Google are tied for No. 5 on the Forbes 400 list of richest Americans. The Wall Street Journal estimated the pair spent in the neighborhood of $15 million for the used Boeing 767, and then invested at least $10 million more for upgrades like private staterooms with king-size beds.

What’s the connection between those two events? Well, you may recall that Google was yet another handsome jock that the NC legislature paid for its affection. It got tax breaks totaling $260 million from the state and local governments to locate a plant in Lenoir — or to put it more vividly, it got ten more upgraded jumbo jets from us, the taxpayers.

What did my pal David, who built a one-man marketing business operated out of his spare bedroom into a thriving firm employing a half-dozen people, get in the way of tax breaks and incentives from the legislature? A steaming pile of squat.

Forget about asking how this is fair. Clearly, it’s not. In fact, the state’s one effort at fairness ended up costing taxpayers even more. The aforementioned $60 million incentive deal started out as a $40 million package of goodies to Goodyear Tire & Rubber, which has a plant in Fayetteville. But after Gov. Mike Easley vetoed that giveaway, the legislature tweaked it — in the name of fairness — to give $20 million to Bridgestone Firestone, too, which operates a competing tire plant in Wilson. Oh, yeah. That’s better.

So instead of asking about fairness, ask how it can be legal. That’s what the N.C. Institute for Constitutional Law has done with its court challenges to the legislative giveaways. So far, the institute’s efforts have seemed like a Quixote-like crusade to have such giveaways declared unconstitutional. But all it needs is one favorable decision from one judge to get the issue rolling.

It seems like a straightforward matter to me. Our tax laws may be a patchwork quilt of deductions and benefits, but they’re still equally available (at least loosely) to all. Not everybody gets a tax break for dependent children, for instance, but if you’re not getting that break it’s because you’ve chosen to not have or adopt a child. But passing laws that give tax breaks only to specifically named companies is blatantly unjust. It’s as if the legislature had decided that your neighbor should get a bigger dependent-child tax break because it thinks his kids are better-looking than yours.

I’m sure your children are cuter than kittens. But the North Carolina legislature gets homelier by the day.