The ink was barely dry on the N.C. House’s budget proposal for fees and tax credits Monday when the conservative group Americans For Prosperity began lobbying against the plan.
AFP opposes the extension of tax credits for solar and other renewable energy projects as well as credits for historic preservation. The group’s state director, Donald Bryson, wrote to the House Finance Committee ahead of its 5 p.m. meeting Monday to debate the plan.
“Make no mistake, the refundable portion of these tax credits are a form of direct government spending – in other words, a taxpayer financed handout,” Bryson wrote. “Whenever the state government awards a refundable tax credit, it pays for that refundable tax credit by either a cut in other state programs, higher taxes, or taking on more debt (which eventually needs to get repaid through higher taxes).”
But backers of the renewable energy credits say they effectively pay for themselves. Between 2007 and 2014 – according to numbers released by supporters – $229.8 million in tax credits have led to over $2.6 billion in private investment.
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Bryson said the House should instead kill the tax breaks and lower overall income tax rates. That approach has powerful supporters in the state Senate, where Republican leaders are already considering plans to lower personal and corporate income taxes.
“The General Assembly should widen the tax base by eliminating targeted tax credits and cut overall tax rates instead of subsidizing politically connected industries and companies with tax credits,” Bryson wrote. “Consumers and investors – not politicians – should decide which industries, companies and projects succeed by engaging in unrestricted trade.”