The Council on State Taxation (COST), a tax policy think tank funded by big, multi-state corporations, just released its annual fifty-state study of state and local taxes paid by businesses.
Once again, contrary to the claims of North Carolina’s anti-tax crowd and despite the additional tax revenue from the temporary tax package, North Carolina continued to rank among the states with the lowest business taxes in the country through fiscal year 2010. In only one other state, Connecticut, did businesses pay a lower amount in state and local taxes as a share of the state’s private-sector economy.
One would think that paying such low taxes would satisfy the interests of big corporations operating in the state, but apparently even extremely modest tax obligations are too much to pay for the significant benefits corporations receive from public investments in education, infrastructure, and public safety.
When introducing House Bill 619, which the Department of Revenue estimates is likely to reduce big corporations’ state tax bills by almost $100 million per year, on the floor of the Senate, Senator Rucho graciously thanked — you guessed it — the Council on State Taxation for their assistance in putting together the bill.
Albert Einstein is quoted as having said that the definition of insanity is doing the same thing over and over again and expecting different results. Anti-tax crusaders have been arguing for decades that low business taxes are the key to spurring job growth. Given that North Carolina has consistently ranked as having at or near the lowest state and local business taxes by COST’s measure for years, one would expect the state to be in the midst of a great jobs boom.
One doesn’t need to read the recent study by the North Carolina business journals, which ranked North Carolina 39th in job growth over the past five years, to know that the promised jobs haven’t been forthcoming.
Members of the General Assembly may believe that this recent round of tax cuts will finally bring the jobs that have been anti-tax crusaders have been promising for decades, but it’s pretty clear what Einstein would think of this logic.