A Winston-Salem Journal editorial this morning sharply criticized the General Assembly and the Governor for passing into law a measure that enables multi-state corporations to dodge state corporate income taxes by shifting profits earned in North Carolina to tax-haven states like Delaware and Nevada.
The editorial is critical not just of the damaging impact of the new corporate tax rules in undermining state revenues but also because it was passed “in a reckless and irresponsible way.” Instead of adhering to long-standing practice of first assessing the fiscal impact of a bill before sending it to the floor for a vote, legislative leaders insisted that the proposed corporate tax changes would have no fiscal impact, despite information from the Department of Revenue that the changes could cost upwards of $100 million per year in state revenue.
In the end, legislators rushed to pass the bill, promising to study and revisit the legislation before the next session. But as the editorial notes:
This is not the way to make laws. The legislature should have had a clear understanding of this bill’s fiscal implications before passing it, and the governor should have had the same knowledge before she signed it.