It has been stated that due to my support of House Bill 994 that I do not have the economic welfare of the District at heart. Please find this letter as a response to this false statement.
Please know that the focus of my heart is the prosperity of the 16th District, and the State as a whole, regarding each piece of legislation that I support on your behalf. Allow me to stress that the very purpose of my support for House Bill 994 was to bring light to the structure of the NC Film Incentive Tax Credit and the refundable nature above and beyond the production’s tax burden in order to keep your tax dollars here in North Carolina. If the bill was moving forward I would be more than happy to address issues that some have raised in regard to the inability for one time productions to be able to carry forward the tax credit. Instead of having that discussion, the message by others is that the bill sponsors have aimed to kill the film industry; which is far from the truth whether viewed directly or indirectly. Please realize that I have a responsibility to be accountable to how your tax dollars are spent and an obligation to the Constitution of North Carolina. The legislation I supported illustrates my commitment to both of those obligations. Please see the link below regarding the viewed unconstitutionality of the refund mechanism and how House Bill 994 would fix this problem.
Apart from the bill in debate is the discussion regarding the economic prosperity that targeted tax incentives (credits, grants, and subsides) bring in comparison to a fair, equitable, and unbiased across the board tax reduction. Prior to forming an opinion, I have committed myself to research and study that speak to the fact that a tax reduction for all citizens and business leads to multiple-fold the economic growth than a targeted incentive. My reference is to economist not to politicians; while all economists may not agree (i.e. Hayek vs. Keynes) there is very strong support of my position. Therefore the economic growth argument aligns with the principle argument that money taken from your pockets to fund the role of government which is then given to private business (which could be your competitor) in the name of economic development is crony capitalism and is flat out wrong. Please click the link below to a study from UNC, surprisingly enough, that concludes that if anything the State should focus on grants/subsides with performance measures and stay far away from targeted tax credits.
In regard to the numbers reported from the growth and job creation that targeted incentive leads to, touted many times from the individuals and industries directly receiving your tax dollars, the reoccurring theme is that they are often not compared to an across the board tax reduction and many times they do not consider opportunity cost. For example, say that I took from you $50,000 and then in the name of the economic growth of the 16th District I built a pool with a bunch of landscaping in my backyard. I would employ local businesses within the District to furnish the plants, irrigation, plumbing, the pool, concrete, stones, etc. This injection of $50,000 into the local economy would cause economic growth and we could study the multiplier effect of the dollars, the job creation, and so on. But the one item that a majority of these studies supporting target incentives, like the example I gave of taking $50,000 from your pocket and putting that money to use in the District, is that they do not figure the cost to you. They do not consider the fact that I took $50,000 from your pocket and consider what return you could have received if you were left to choose how you spent your own money. They do not consider opportunity cost. If you transfer wealth from one and give to another, sure the latter will prosper, but at the expense of the former. To accurately study economic growth from targeted tax incentives, one must consider opportunity cost.
My focus is to bring prosperity to the District that I have had the privilege to serve and to all of North Carolina. With tax reform and the budget process underway, it is very important to our area and to North Carolina as a whole to have this discussion regarding targeted tax incentives. I would not be willing to take the beating in the media if I was not convinced that each one of you and your posterity would prosper greater with a lower tax burden in the place of the crony capitalism that is manifested through target tax incentives. I believe that you can better decide how to spend your money than a bureaucrat, and this includes the dollars taken from you to fund the role of government through taxation. May each of you prosper and may the truth resonate across this District, our State, and our Nation.
Rep. Chris Millis
P.S – Please read item #5 under the economy section of the North Carolina Republican Party Platform
“We oppose bailouts and corporate welfare. It is contrary to the free enterprise system to recruit or retain businesses with targeted tax incentives when other businesses bear the full burden of taxation. Higher tax rates on the many to provide preferential treatment for the few is unfair. The best way to promote economic growth is to reduce our overall tax burden.”