NC Budget and Tax Center

A half dozen economic challenges that tax cuts at the top don’t fix

North Carolina legislative leaders are once again debating the value to our economy and well-being of cutting taxes for the wealthy and big companies. The debate tends to remain constrained to the short-run evidence from 2013 to the present on various traditional economic indicators at the state level. My colleague Patrick McHugh has pointed out that a review of that data should lead us all to conclude that the tax cuts since 2013 have delivered no special boost to the state’s economy.

And yet, we should also be considering the opportunity cost of North Carolina’s tax cut experiment.

It has kept our state from addressing genuine economic challenges that public policy and public investment could make progress on in favor of a flawed economic theory that at worst exacerbates the challenges and undermines a pathway to better economic outcomes for all.

Here are just SIX of the economic challenges that North Carolina faces that are not addressed by tax cuts at the top or for big companies:

  1. Job growth is concentrated in just a handful of counties, leaving the rest of the state struggling with too few jobs for those who want to work and the need for infrastructure to connect people to the areas where jobs do exist. Tax cuts that focus on reducing the rate on corporate profits don’t target the small businesses and homegrown companies that are the primary job creators statewide and integral to the smaller communities across the state. Instead, these tax cuts are primarily delivered to shareholders, many of whom do not even reside in North Carolina. At the same time, tax cuts drain the state of revenue that could provide dollars to local governments and regions to connect each community to where the jobs are.
  2. Income inequality continues to rise across the country and in North Carolina. Since the recovery began in 2009, until the last available data in 2015, the top 1 percent in North Carolina have captured more than all of the income growth. How is such a thing possible? The answer: When the income of the bottom 99 percent of North Carolinians actually declines over the same period. As has been well documented in the academic literature, there is no consensus that tax cuts for the highest income taxpayers will lead to new job creation.   Tax cuts at the top have made worse the concentration of income.
  3. The job growth that is happening isn’t paving the way to the middle class for majority of North Carolina workers and isn’t strong enough to accelerate wage growth for all. The quality of jobs that get created in an economy matter for the ability of those jobs to improve well-being. When jobs pay too little for people to make ends meet or make it difficult to move up the economic ladder, the ability to reach our economic stride is blocked. Read more
Commentary

Weekend humor from Celia Rivenbark: A memo to flummoxed conservative pundits about AOC

Celia Rivenbark

Although I almost hate to write this out loud, it’s time to tell “the others” the truth: Alexandria Ocasio-Cortez is just messin’ with you.

I hate to tell you because it’s hilarious when y’all get all high horsey about how “dumb as a box of hammers” the freshman from New York’s 14th Congressional District is because you honestly believe she is terrified of her own garbage disposal.

I mean, hell, you’ve had a garbage disposal ever since you were just a wee angry conservative incapable of recognizing irony and humor in its most hilarious form. What’s her problem?

I repeat: She’s messin’ with you. I imagine she got the idea after y’all went ape doodoo about a video showing her dancing at a party when she was a student at Boston University. Not nekkid dancing, just dancing. Somehow, this moment of utter normalcy threatened y’all down to the bitter marrow in your crackling bones.

Sorry, not sorry.

Alexandria Ocasio-Cortez is having a moment. And, every now and then, it’s just for fun.

The now-famous Snapchat of her over-the-top horror at the ghostly growls coming from the garbage disposal in her new D.C. apartment wasn’t real. But it was real funny.

Unfortunately, as we all know by now, “nothing is more curious than the almost savage hostility that humor excites in those who lack it.”

I have that George Saintsbury quote wood-burned on a plaque in my office and I need to read it and breathe deeply at least eleventy times a day.

Yes. I know there’s no such word as eleventy. Stand down.

The conservative pundits, bless their tortured, tangled hearts (thanks Dixie Chicks) didn’t get the joke and were off and runnin’ like the gun show had just set up shop over at the National Guard Armory.

Cue NRA misplaced outrage.

The humor-impaired, irony-resistant strain of conservative is particularly annoying because, let’s be honest, their default is a cocktail of fearmongering and pious outrage. Humor? That’s a plot by the Hollywood elite and anyone who has ever done a juice cleanse.

They are ALL the preacher in “Footloose” (before he sees the light). The very worst motives are assigned to progressives. At one point, Fox & Friends were “thiiiiissss close” to saying AOC would have to pry their garbage disposals from their cold, dead hands.

AOC’s insistence on breathing in and out every day is enough to incite hate among the far right. But now, this! This mocking of a purely optional appliance (which was outlawed in New York for many years) whose sole job is to grind leftovers to bits, why…it’s un-American!

But there’s no lightness in the hearts of AOC’s loudest critics. Perhaps they should give her the old witch test: Bake a cake with rye flour and the urine of her enemies, feed it to a dog and if the dog dies, she’s a witch. Look for that recipe and many more in the Barefoot Contessa’s next cookbook: “Jeffrey’s Favorite Quiches & Spells.”

That was a joke.

 Celia Rivenbark is a NYT-bestselling author and columnist. Visit www.celiarivenbark.com.

News

State will transfer transgender prisoner to women’s prison

Kanautica Zayre-Brown

The North Carolina Department of Public Safety will transfer Kanautica Zayre-Brown, a transgender woman it is holding in a men’s prison, to a women’s facility.

The department, which has for months been under public and legal pressure to make the transfer, announced its decision in a Friday afternoon letter to the ACLU of North Carolina, which is representing Zayre-Brown.

The transfer will happen by August 22, according to the letter. That will give the department time to “continue researching and implementing best practices from the states that have transferred transgender women to female facilities,” according to the letter. The department did not specify to which facility it will transfer Zayre-Brown, but said it will be revising policies and giving staff training on those best practices.

Zayre-Brown is a 37-year-old transgender woman serving a sentence for insurance fraud and obtaining property by false pretenses. She says she has accepted her sentence but should not have to serve it among male prisoners where she fears for her safety and her gender identity is not acknowledged.

Gender transition is not the same for everyone. Zayre-Brown identified as female from childhood and began actively transitioning in 2010, undergoing hormone therapy to treat gender dysphoria. Though many transgender people elect not to have any surgical procedures related to their transition, she has had her breasts augmented and genitals altered as part of gender confirmation surgery. She also legally changed her name.

Despite this, since her arrest in 2017, she has been held in a series of all-male facilities where she has had to sleep and shower with men. Prison staff would not refer to her by her legally changed female name or acknowledge her as female, said the ACLU.

In March, as the deadline to avoid a lawsuit from the ACLU  approached, the North Carolina Department of Public Safety transferred Zayre-Brown from the Harnett County Correctional Institution. Not to a women’s prison, as she and the ACLU had requested, but to the smaller Warren Correctional Institution for men in Warren County, near the Virginia border.

The ACLU and other supporters of Zayre-Brown said that wasn’t good enough, keeping the pressure on for transfer to a women’s facility.

“We are relieved that there is a date by which Ms. Zayre-Brown will be transferred to a prison for women, but this isn’t over,” said Chase Strangio, Staff Attorney for the ACLU’s LGBT & HIV Project. “Each day that Kanautica is held in a men’s facility is a day that her constitutional rights are violated and her health compromised.”

“We will stay vigilant until she is transferred and then for the rest of her sentence until she is released,” Strangio said. “So many trans women across the country — particularly Black trans women — are funneled into the criminal legal system where they face severe risk of harm once incarcerated. Our community is under attack and we are working to minimize that violence.”

Sneha Shah, the ACLU staff attorney representing Zayre-Brown, said the group will keep fighting to be sure she is transferred as quickly as possible.

“We’re glad that DPS finally agrees that, as a woman, Kanautica belongs in a women’s facility,” said Shah. “It should never have taken this long for officials to recognize that Kanautica’s health, safety, and dignity are all jeopardized by keeping her in a men’s facility.”

The ACLU provided comment from Zayre-Brown Friday afternoon.

“I feel good that there is a plan in place, but I will feel much better when my transfer is finalized,” Zayre-Brown said. “My mental health is still depleting, and I would have broken a long time ago if it weren’t for the community behind me. They give me the strength to keep going.”

News, Trump Administration

LGBTQ advocates: Trump health policy changes will hurt trans people

LGBTQ advocates are denouncing an attempt by President Donald Trump’s administration to end transgender protections in the Affordable Care Act.

Section 1557 of the ACA was interpreted by President Barack Obama’s administration to include transgender identity under protections against sex discrimination. That part of the act has been blocked from going into effect through lawsuits since 2016.

On Friday, the Trump administration issued a new rule that proclaims gender identity will not be protected.

“When Congress prohibited sex discrimination, it did so according to the plain meaning of the term, and we are making our regulations conform,” said Roger Severino, director of the HHS Office for Civil Rights, in a statement on the rule.

There is a 60 day public comment period before the rule can be finalized.

Equality NC denounced the proposed change Friday.

“Transgender people, like all people, have the right to expect that when they seek medical care, they will be treated with respect and not with harassment or violence,” said Kendra Johnson, executive director of Equality NC. “Today’s proposed rule upends two decades of courts finding that sex discrimination laws protect transgender people from that treatment. We need folks to tell HHS that we oppose any rule that lets doctors, nurses, and hospitals deny care based on who you are.”

“This move by the Trump administration is the latest in series of disturbing and targeted attacks on transgender Americans over the last several years,” Johnson said. “From our schools to our businesses to our military, transgender folks are part of the social fabric of everyday life and deserve the same rights, protections and care as all other Americans. Equality North Carolina is infuriated at this attempt to institutionalize discrimination against our trans brothers, sisters and siblings and affirms our solidarity with all folks affected by this attack.”

Commentary, News, Trump Administration

How Trump’s defiance may only bring us closer to impeachment

The president, our orange obfuscation factory in chief, is playing chicken with Congress again, insisting to the press this week that he won’t be negotiating with top Democrats until they halt their investigations of him.

If, perchance, you harbored some doubt that the president would put his own self-interest above that of his country — and if so: What? How? Where have you been? — Trump scuttled an infrastructure summit this week with the peevish ultimatum.

But Trump’s refusal to cooperate with the ongoing House probes — instructing former White House counsel Don McGahn to defy a House committee subpoena — seems likely to only bring us closer to impeachment proceedings. Recall that McGahn is an integral figure in the Mueller report’s most damning accounts of possible obstruction of justice charges.

I wrote at Policy Watch this month that none of us has any time for Democrats’ ceaseless hand-wringing over impeachment, not with a lawless commander-in-chief in the White House.

And Democrats’ nascent star, Alexandria Ocasio-Cortez, seems to agree.


This week, The Atlantic‘s David A. Graham wrote a piece about how Trump’s combative stance with the House investigation makes his impeachment all the more likely.

It’s not, of course, out of the realm of possibility that Trump wants an impeachment, considering the likely possibility that a Republican-controlled Senate — buttressed with blindfolded Trump allies like North Carolina’s own Richard Burr and Thom Tillis — clears him.

That said, it should be considered just as likely that the impeachment proceedings — remember: impeachment is a proceeding, not an outcome — uncover more information than we have today, certainly more than our corrosive commander-in-chief would yield of his own accord.

Read The Atlantic piece below, and its incisive reading of House Speaker Nancy Pelosi. It’s certainly worth your time.

Do you remember the little woven finger traps you sometimes got as a kid, as a party favor or a reward at a fair? You could comfortably stick your fingers in, but if you tried to pull them out, the weave would tighten and you’d be stuck. Only by maneuvering gently, and not pulling too hard, could you extract yourself.

President Donald Trump finds himself in a sort of impeachment finger trap right now. He isn’t certain to be impeached—but every step he’s taking to try to squirm out of it seems to tighten the bind he’s in.

Consider the president’s tantrum on Wednesday. After inviting Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer to the White House for a meeting on infrastructure, Trump stomped out of the meeting, supposedly because Pelosi had earlier accused him of participating in a cover-up. (The accusation is unrebuttably true.) Trump insists he did not throw a fit—“I was purposely very polite and calm, much as I was minutes later with the press in the Rose Garden. Can be easily proven.”—but one can’t calmly blow off a meeting. It defeats the point.

Trump has many things to be upset about. His feint on infrastructure came to nothing: Pelosi and Schumer were happy to go along with his plan, but he couldn’t rally Republican support for it. His former spokeswoman Hope Hicks has just been subpoenaed by the House Judiciary Committee. And his strategy of stonewalling Congress in the face of Democratic investigations is unraveling quickly. There never seemed to be much hope that it would block the probes altogether; instead, the goal appeared to be to bog down the process and run out the clock before the 2020 election.

So Trump is suggesting he won’t work with Democrats on anything until they drop their investigations. “It is not possible for them to investigate and legislate at the same time,” he tweeted. But being able to do both oversight and lawmaking is precisely how Congress is structured, and as veterans of any previous administration can attest, plenty can get done while Congress is investigating a White House.There is also no chance Democrats are going to drop their investigations, and that’s where the finger trap comes in. By and large, the House Democratic caucus has been wary of impeachment. Even after Special Counsel Robert Mueller’s report all but accused the president of obstruction of justice and suggested that Congress ought to act, most members were content to follow Pelosi’s slow approach and to avoid open calls for impeachment.

More recently, however, that has changed—and the spark has been the White House instructing former aides like Don McGahn to neither produce documents nor testify in response to subpoenas. It’s one thing to fire the FBI director to kill an investigation, pressure aides to lie, and try to fire the special counsel—you might very well get away with only harsh words for that—but start stepping on Congress’s prerogatives, and its members start to get very angry very fast. Specifically, they start to demand impeachment inquiries.

If Trump were to follow through on his threat to not do anything with Congress until House Democrats drop their investigations, things could get even dicier. Within the next few months, the debt ceiling will need to increase and the government will need to be funded. Democrats might have been tempted to hold those bills hostage, just as Republicans have done in the past—but now Trump has given them an opportunity to pass an increase and a spending bill and dare the president to call their bluff. A senior government official told CNBC that the debt ceiling and funding are not subject to Trump’s ultimatum, but the president has demonstrated again and again that only he can speak for himself. And if he doesn’t act, and the U.S. defaults or shuts down? It could be fodder for another article of impeachment.

Thus far, Pelosi has been the brake on the members of her caucus most eager to impeach, but Trump’s erratic behavior is backing her into an ever-more-untenable situation. On Wednesday, she said, “I pray for the president of the United States. And I pray for the United States of America.” Later on Wednesday, she said, “In plain sight, this president is obstructing justice and is engaged in a cover-up. And that could be an impeachable offense.” On Thursday, she said that she was concerned for Trump’s well-being and said he was conducting an “assault on the Constitution of the United States.” But Pelosi continues to say she doesn’t support impeachment, and reportedly told Democratic lawmakers, “He wants to be impeached, so he can be exonerated by the Senate.”

With each comment like this, Pelosi’s balancing act becomes more challenging. Even if it is true that the odds of conviction in the Senate following an impeachment are very long, it’s difficult to tell your members and your constituents that the president is attacking the Constitution and has committed impeachable acts, and then decline to even launch an impeachment inquiry. There’s an analogy with the Republican rhetoric about Barack Obama: Once GOP voters were convinced that Obama was a tyrant, everything the Republican Congress did short of acting that way started to look like a betrayal, and incumbents paid a price for that in their primary elections.

While Pelosi’s explicit position is against impeachment, her implicit position, I have argued, is actually not yet. Trump’s response to the investigations is making yet closer for her and for the rest of the Democrats. His fingers are in the trap, and he’s pulling furiously, but the trap is just getting tighter.