Gov. McCrory just came back from Silicon Valley with supposed tips about how to foster startups.
Says the Governor:
“Our tax code is not conducive to the first-round investors for venture capital, for high-risk, first-round investors,” he says. “If they make an investment, they often move (the startup) to a no-tax state, with the profits. That means we lose that money and we lose that sweat equity. We want that money to be reinvested in North Carolina.”
Oh really? Venture capitalists are seriously going to uproot the founders of their investments and risk losing them just so they can save a few bucks on their taxes? I have been deeply involved in startups for over 20 years and I have never heard of this happening to a North Carolina startup.
But let’s say this somehow does happen without me knowing about it. C’est possible, n’est pas? Let’s ponder for a moment which state has more of the top startups. Let’s ponder which state is home to the world’s most successful startups. Let’s ponder which state is home to the most venture capital. That would be … California, right? And guess where California falls on the list of states with the highest total taxes? California is ranked 17th in CNN/Money’s list of total taxes of states, higher than 33 other states and a full 18 spots more expensive than North Carolina.
I don’t know if Gov. McCrory has been partaking in California’s state … uh, “flower” but in California’s case high taxes don’t seem to make a damn bit of difference in creating successful startups. What does matter to startups is attracting creative people. You attract creative people by fostering a high quality of life, supported by a good, fair tax base.
This trickle-down stuff is nothing but a race to the bottom. The Governor should know better.