Business and State Leaders Promote
Lower Business Taxes at 2007 Forum

At this year’s Economic Forecast Forum hosted Jan. 2 in Durham by NCCBI and the NC Bankers Association, high-profile leaders such as State Treasurer Richard Moore and BB&T Chairman and CEO John Allison touted lower business taxes to improve North Carolina’s competitive position and create jobs in our state.

In a televised interview with News 14 Carolina, Treasurer Moore said that he has been talking about eliminating the corporate income tax for years. “It would be a wonderful thing to say to businesses around the world,” he said. “Come to North Carolina, grow your business, we’re not going to tax you."

When asked whether our state’s tax climate needs to be addressed because it is viewed unfavorably compared to other Southeastern states, Moore said, “Of course, you can never be satisfied with where you are. You always want to charge as little as possible.” He added, “I actually think that North Carolina’s corporate income tax is an outlier. I think it’s too high. I think we need to look at reducing it, but whenever you talk about reducing a specific tax you need to look at the total pie.”

The state’s elected banker also talked during the interview about government accountability when it comes to spending business tax dollars. “Government has to do its part by taking the resources we have and leveraging them to the maximum benefit,” he said. “If we take out of business’s bottom line, if we take taxes out, what are we going to do with them? Are we getting the biggest bang for the buck that we possible can?”

When the news station interviewed BB&T Chairman and CEO John Allison, he made similar observations about North Carolina business tax climate. “We’re not tax advantaged versus the Southeast,” Allison said. “A lot of multi-state employers carefully scrutinize the tax structure. I think we’d be far better off if we actually cut or eliminated the corporate income tax in North Carolina.” He called North Carolina’s tax climate unfavorable versus most of the Southeast, and only average versus the U.S. as a whole.

When asked by News 14 Carolina’s Tim Boyum about economic development incentives to lure businesses to North Carolina, Allison said, “I think it’s better to have a lower tax rate for everybody because most of the jobs are created by employers that are already here.”

More than 1100 business and government leaders, policy makers and other thought leaders attended the 2007 Economic Forecast Forum at the Sheraton Imperial RTP to hear the outlook for 2007 from an impressive panel of experts that included noted business journalist Knight Kiplinger (The Kiplinger Letter and Kiplinger’s Personal Finance Magazine) and Harry Davis, professor of Finance at Appalachian State University and NCBA economist—in addition to Moore and Allison.

While the outlook for this year for our state was positive overall, it is telling that two of the speakers at the Forum pointed to lower business taxes as an area of concern that needs addressing if North Carolina is to remain competitive with other states across the country and globally. Their comments match what our State Chamber heard from North Carolina business owners across the state at 18 “listening meetings” held from September to mid-November.

By participating in our State Chamber Pit Stops and completing our Business Ballots, business leaders from as far west as Asheville and Boone to as far east as New Bern and Wilmington focused our Chamber’s attention on the most important issues to the growth and profitability of their businesses. The top two issues noted on our Business Ballots were lower business taxes and healthcare costs, and we were told again and again that North Carolina’s current tax structure is a deterrent to business growth and job creation in our state.

Results from a survey question in this newsletter also point to business taxes as a top-of-mind concern among business leaders. When we asked whether North Carolina’s current tax structure is a deterrent to business growth and job creation in a previous edition of THE BUSINESS Advocate, more than 80 percent of respondents said yes.

Particularly harmful to small businesses in North Carolina is our state's top marginal personal income tax rate.  At 8 percent, it is among the highest in the country.  Seventy-five percent of businesses in North Carolina have 10 or fewer employees, and 93 percent employ less than 100.

”Our customers are telling us that North Carolina’s business tax climate impacts their competitiveness and their capacity to grow and create jobs,” said NCCBI President/CEO Lew Ebert. “We will continue to listen to our customers as we develop our agenda for the fast-approaching Long Session of the North Carolina General Assembly. It is significant to hear industry leaders like Mr. Allison and state leaders like Treasurer Moore echo what we’re hearing from our customers at an event like this year’s Forum."

It is noteworthy that at a similar Economic Forecast event hosted by the Greater Raleigh Chamber of Commerce on Jan. 3, John Silvia, chief economist at Wachovia Corporation, told several hundred business executives in attendance that state government spends too much money, and that North Carolina ranks only 40th in the State Business Tax Climate Index produced by the non-partisan Tax Foundation. He said that North Carolina is “not very competitive,” and that “the best economic development tool South Carolina has is North Carolina taxes.”  
 
Visit http://rdu.news14.com/content/top_stories/?ArID=97439 to view News 14 Carolina interviews with State Treasurer Richard Moore and BB&T Chairman and CEO John Allison in their entirety.