Remove barriers to growth

Mixed signals.

Some things are clear: Lower taxes, fewer regulations, skilled workers, and efficient infrastructure lead to economic growth. A robust and growing business community creates jobs. Vouchers offer opportunities to low-income students, and school choice leads to better and more fulfilling educational outcomes. Investments in education and public safety pay off.

Some things aren’t so clear, send mixed messages and confuse North Carolinians. We hear there’s support for entrepreneurs, encouragement for people to innovate, opportunities to invest and incentives to start businesses.

But barriers exist.

Many occupations require a license, with initial and yearly renewal fees along with excessive training and experience requirements. A license is required for 189 occupations in North Carolina. On average, states require a license for 43 occupations. If allowing people to pursue the occupation of their choice unleashes opportunity, particularly for low-income jobs, then remove burdensome licensing requirements.

North Carolina has the largest craft brewing industry in the South, with 203 breweries and brew pubs. An old state law requires a brewery to turn the distribution of their beer over to a third party distributor once it produces 25,000 barrels in a year. As the industry has grown, the number of breweries bumping up against this threshold has grown. They’re forced with giving up control of their brand, business and investment as they grow. If encouraging new business creates jobs, incentivizes entrepreneurs, then remove the barrier to growth.

We have the best health care in the world but yet struggle to keep costs down and ensure access. While Washington works to fix ObamaCare, state leaders have rejected Medicaid expansion and initiated comprehensive Medicaid reforms. North Carolina Certificate of Need laws prohibit medical experts to invest in new and innovative medical equipment and limit the growth of facilities where they’re most needed. If we are to ensure low-cost quality care with access, particularly in rural areas, we need to remove the barriers to investments in medical equipment and growth of long-term care, neo-natal clinics, glaucoma centers and ambulatory surgical centers and mental health facilities. Remove the onerous application and review process.

North Carolina is the center of innovation, research, and technology. Research and development at our universities, investments in bio-technology and pharmaceuticals and advancements in agriculture have led to venture capitalist investments and corporate growth. But the process for approval is so costly only big companies with legal teams, time and resources can afford to participate. Little guys sometimes have the biggest ideas.

Tax reform has resulted in a flat personal tax rate, eliminated several taxes altogether and a simpler system. But it’s not simpler for all taxpayers. The expansion of sales tax was intended to broaden the base, allowing rates to fall. Confusion over how the expanded sales tax applies has frustrated businesses. Adding further to the confusion are mixed messages from the Department of Revenue when these companies seek advice. Are elevators personal or real property? Do they owe tax on installation or only on service contracts or neither or both? Should they collect tax on a contract with the police department to wash patrol cars weekly? Confusion over the expansion of sales tax is a barrier to future growth as many of these companies are expending resources for legal advice, CPAs and tax experts, instead of investing in their companies. If a simple tax system is the goal, clean up and clarify the sales tax expansion.

Reforms over the past few years have led to more jobs, more opportunity, and more economic growth. Lower taxes, less debt, fewer regulations, better investments in education and infrastructure have set North Carolina on the road to freedom. But the barriers send a mixed message. Remove them.

Becki Gray is senior vice president of the John Locke Foundation.

Becki Gray is senior vice president of the John Locke Foundation.

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