Cutting corporate tax rates is bad economic medicine
There’s more to a good business climate than low taxes.
Look around at the states with rock-bottom tax rates — South Dakota, to name one example, or Alabama and Mississippi, for places closer to home. None of these places are as economically competitive as North Carolina.
North Carolina has built its economic engine around vibrant public investment. We have world-class universities that help workers educate themselves — and encourage bright, talented people to stay here. It’s why, even in bad times, we’re better off than states that take a different path.
A new study shows why. Cutting corporate tax rates is a counter-productive economic strategy.
There are about a dozen reasons this is true. The most compelling to me: public investments help attract business, and when you slash taxes, you have to cut services. A well-educated and healthy workforce is fundamental to business success, and those qualities require public investment.
That first link provides an able summary of the arguments. It’s based on this study from Iowa, which itself builds on decades of research. If you want to wade through the wonky study, it’s well worth it.
But just look around. North Carolina has been building for the future for years, and it has paid off. Let’s not undermine that progress now.