How Much Are These Jobs Costing Us?
We’ve got no beef with Michelin. We’re glad the company has decided to invest $750 million and create 500 new jobs in South Carolina.
Our only problem? The fact that South Carolina has to cut the company a check in exchange for this capital investment and job creation.
“State and local incentives were approved for Michelin’s expansion,” the very last sentence of the S.C. Commerce Department’s announcement of the Michelin expansion notes.
How much did these incentives cost South Carolina taxpayers? Neither S.C. Gov. Nikki Haley nor her economic development agency is talking …
As we’ve noted on numerous previous occasions, these incentives are bad public policy – shifting the state’s tax burden onto the backs of small businesses.
How big a shift are we talking about? Well, small businesses (and rental property owners) are projected to be on the hook for a whopping $3 billion (or 47 percent) of the state’s $6.2 billion property tax burden in FY 2012-13. Seven years ago, these two groups were responsible for less than a third of this burden.
Obviously this shifting tax liability is killing job creation among our state’s small businesses – one reason why South Carolina’s unemployment rate consistently ranks among the highest in the nation (no matter what the U.S. economy is doing).
Haley clearly isn’t concerned with any of that, though … as evidenced by her ongoing willingness to bet on big government. In fact this one-time Tea Party diva and small business supporter has turned into the mother of all crony capitalists since taking office … doling out hundreds of millions in corporate welfare while doing next to nothing for individual taxpayers and the tens of thousands of small businesses and sole proprietors who file individual income tax returns.
No wonder the Tea Party bailed on Haley almost as soon as she took office …
Our state has dramatically ramped up its investment in corporate welfare over the last decade (from $34 million to nearly $1 billion a year). Unfortunately, that approach has failed to turn our state’s economy around. At some point, we hope that Haley and the “Republican-controlled” S.C. General Assembly acknowledge this failure and start incentivizing job creation, capital investment and consumer expansion via broad-based individual income tax relief.