Uncategorized

Wonky but important fact of the day – please share

If you had any doubt that there is a desperate need to overhaul North Carolina’s tax code, consider the following fact that was reported yesterday at a Together NC event here in Raleigh by the N.C. Budget and Tax Center’s estimable Edwin McLenaghan:

From 2008 to 2009, the total personal income (TPI) of the state of North Carolina fell by 0.8%. Now, admittedly, this was a big deal. It was the first time TPI had contracted in decades. But still, the fall was less than 1%.

The impact that this drop had on state revenues, however, was HUGE. For the same one-year period, state tax revenues fell 11.7%. In other words, at the very moment that public services and structures were most needed, the state was terribly hamstrung in its ability to fund them.

This is more proof that North Carolina’s tax system has become obsolete. Because it was designed in the 1930’s and fails to capture revenue from broad swaths of the economy, it’s become way too volatile.

We need a new and improved tax system (particularly in the sales tax realm) that broadens the base and lowers rates. This would smooth out the roller coaster and leave the state less reliant on federal bailouts and politically painful rate hikes to keep up with the needs of a growing state and ahead of future downturns.

 

 

2 Comments


  1. Louie

    September 23, 2010 at 1:57 pm

    time to legalize, tax and regulate cannabis like they are going to do in California.

  2. Jan

    September 24, 2010 at 12:56 pm

    Well it’s perfectly obvious to me that we have to get money from the folks who have it, not from the folks who don’t.

Check Also

Policy Watch takes home seven NC Press Assn. awards; Sorg wins prestigious freedom of information honor

The reporting and commentary team at NC Policy ...

Top Stories from NCPW

  • News
  • Commentary

Any protection the courts offer Dreamers is temporary, but all eyes are on the U.S. Supreme Court to [...]

The good news is that the levels of GenX in Wilmington’s drinking water is testing consistently belo [...]

This week NC Child and the NC Institute of Medicine release the 2018 Child Health Report Card, an an [...]

North Carolina’s public school system is one of the lowest funded in the nation when adjusted for co [...]

In “Lessons on political speech, academic freedom, and university governance from the new North Caro [...]

Cracks are forming in the NRA’s death grip on American politics At some point, it’s going to happen. [...]

As the General Assembly wraps up its weirdly timed and generally ill-conceived winter session, it wo [...]

The post Dumb & Dumber & Dumbest appeared first on NC Policy Watch. [...]