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SC Policy Council: Shopping Mall Incentives a Bad Deal for Taxpayers

January 7, 2010

FOR IMMEDIATE RELEASE

SC Policy Council: Shopping Mall Incentives a Bad Deal for Taxpayers

Columbia, SC – January 7, 2010 – A Georgia-based developer is seeking $132 million in targeted tax breaks to build a high-end retail center in Jasper County. The South Carolina Policy Council today released an analysis by College of Charleston economist Peter Calcagno, Ph.D., on an economic incentive package under consideration by the General Assembly. In the version of H 3722 passed by the House, the Sembler Company would receive a 75 percent break on a portion of its state sales tax obligation and a 3 percent sales tax break to aid with infrastructure costs associated with the development of the property. In return, Sembler must invest a minimum of $100 million and hire a minimum of 1,000 employees.

“South Carolina offers a wide variety of selective tax incentives that create distortions in the economy and limit the ability of the private sector to generate economic growth” Calcagno concluded. “The Sembler development is just one more case of such a misguided policy.” Numerous economic studies have demonstrated that incentive packages for retailers are particular ineffective at increasing employment, said Calcagno. “From a public policy standpoint South Carolinians must wonder what kind of research was conducted by policymakers to justify the extension of targeted tax incentives to this type of firm,” he noted.

The special interest tax proposal being considered by the legislature represents more bad public policy for our state:

  • Incentives deals do not create new jobs.
  • The Sembler deal represents the riskiest kind of venture – retail shopping centers.
  • Lawmakers will be asking taxpayers to subsidize competition with local businesses.
  • The only way to ensure long-term economic growth is to eliminate special breaks and cut taxes for all South Carolina businesses.

“There is no evidence that this incentive deal will generate any net new jobs for our state, nor will it produce long-term economic benefits for the state,” said Policy Council President Ashley Landess. “A $132 million investment in a shopping mall seems risky in any economic climate, much less this one.  It is irresponsible to force taxpayers to subsidize a private retail development while their own businesses struggle and their jobs are at risk.”

An Executive Summary and complete economic analysis on the Sembler Company deal are available at the Policy Council’s Web site.

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Note to Editors: The Executive Summary and Issue Paper are enclosed.

Robert Appel

Director of Communications

South Carolina Policy Council

803-779-5022 Ext. 118

803-779-4953 (fax)

robert@scpolicycouncil.com

www.scpolicycouncil.com

www.unleashingcapitalismsc.org

Limited Government • Free Enterprise • Individual Liberty

One Comment leave one →
  1. bandsxbands permalink
    March 3, 2010 3:25 am

    I’m in a love/hate relationship with digital memory because of how prices are always,and I domean always falling. I absolutely hate buying SDs for my R4 / R4i at (seemingly) a cheap price only to see it become a whole lot more cheaper a couple of months later.(Submitted by S3 for R4i Nintendo DS.)

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