In North Carolina, a singular focus on comparing the state’s income tax rates to other states was used to justify massive rate reductions in the 2013 tax plan. But do tax rates determine whether a state is competitive?
It turns out that income tax rates do not indicate competitiveness of a state’s tax code for two reasons:
- The vast majority of people and business make decisions based on other factors
- Tax credits and deductions mean that few pay the full income tax rate. Read More