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State income tax cuts are not job creators

This report from the Center on Budget and Policy Priorities ought to be required reading for the folks determined to slash or abolish the personal income tax in North Carolina.

The tax “reformers” claim their efforts are all about creating jobs, but the Center’s report shows the evidence in a number of studies proves that income tax cuts are a poor strategy for economic growth.

The vast majority of these studies find that interstate differences in tax levels, including differences in personal income taxes, have little if any effect on relative rates of state economic growth.  Of the eight major studies published in academic journals since 2000 that have examined the broad economic effect of state personal income tax levels, six have found no significant effects and one of the others produced internally inconsistent results.

Check out the good work of the N.C Budget & Tax Center for more on the tax reform debate, including this report showing the Civitas/Arthur Laffer plan that’s similar to what Sen. Bob Rucho eventually wants to accomplish would raise taxes on the bottom 60 percent of taxpayers and give the top 20 percent a tax cut, with millionaires getting a $41,000 break.

And it would not create jobs.

7 Comments

  1. Doug

    April 10, 2013 at 1:31 pm

    At least not creators of government jobs, which is what the leftists are after.

  2. Chris

    April 10, 2013 at 1:56 pm

    Of *any* jobs, which is what anyone who would like to see the state prosper would prefer, regardless of political leanings. Unless you enjoy having people on welfare just so you can whine about something.

  3. Alex

    April 10, 2013 at 2:11 pm

    If that’s true, I wonder why Obama was so insistent on federal tax cuts for the poor and the middle class ? Did he not want to create jobs ?

  4. Chris

    April 10, 2013 at 2:16 pm

    Their income would hardly employ anyone else if their tax burden pushes them further into needed government assistance. Obviously.

    The federal government, unlike state governments and personal budgets, can also spend in the red since it operates on a fiat economy. The rest of us do not create our own currency, and therefore cannot print more as needed, so raising the specter of Obama doesn’t win any arguments with regards to discussion of a state budget. Again, obviously.

  5. Chris

    April 10, 2013 at 2:19 pm

    Furthermore, any moneys that lower income folk have typically gets spent here in the US, which helps fuel the US economy, as opposed to being hoarded out of circulation, such as in Switzerland or the Caribbean. Again, … obviously.

    Perhaps if every American is paid no less than a living wage we wouldn’t even be needing this conversation. Again, can’t stress this enough, obviously.

  6. Doug

    April 10, 2013 at 2:47 pm

    good one Alex +1

  7. Gene Hoglan

    April 11, 2013 at 4:54 am

    “Job creation” is a smokescreen. In fact it’s in their interest to reduce employment to keep people desperate for anything available to maximize profit.