NC Budget and Tax Center

Another key justification for tax cuts bites the dust: NC economy is already competitive with neighboring states

Throughout the ongoing tax reform debate, we’ve been hearing the same tired claims that North Carolina’s economy is failing to compete with our neighboring states. And during yesterday’s preview of the Senate tax reform plan, we heard it again as justification for a billion dollar tax cut.

There’s just one problem—these claims are simply not true

As a report released last week found, it’s clear that North Carolina’s economy is performing competitively with surrounding states across every major indicator of economic health, with the exception of the unemployment rate. 

And North Carolina has higher unemployment than neighboring states today because the Tarheel State has historically relied to greater extent on a handful of manufacturing industries that have proved much more vulnerable to offshoring, outsourcing, and global cost pressures.  In 2000, more than 16 percent of North Carolina’s employment was concentrated in manufacturing, the most of any surrounding states. North Carolina lost almost 42 percent of its manufacturing employment between 2000 and 2011, greater than the loss experienced by any other neighboring state.

In fact, if North Carolina’s share of total employment in durable and non-durable goods manufacturing had resembled that of the nation as a whole, the Tarheel State would have 108,000 more jobs today than currently exist, and the state’s unemployment rate would likely be similar to neighboring states.

As a result, North Carolina’s unemployment problem is due to declining competitiveness in specific industries—not to lack of competitiveness in the overall business climate or tax policy. Faced with these very specific challenges, investing in job training and infrastructure to attract and grow the competitive industries of the future is a far better approach to reducing unemployment than the tax cuts currently discussed by the legislature.


  1. Doug

    May 8, 2013 at 10:39 am

    Well that leftist rag is certainly not to be believed. The NC Justice center is going in with their point first and making the facts fit their premise.

  2. Allan Freyer

    May 8, 2013 at 10:42 am

    Doug, do you have any evidence to back up that claim?

  3. gregflynn

    May 8, 2013 at 11:32 am

    There’s only one thing Doug has backed up but that gets relieved every time he comments here.

  4. Gene Bridges

    May 8, 2013 at 11:45 am

    Doug writes: Well that leftist rag is certainly not to be believed.

    That’s called the genetic fallacy: This is a general case of the ad hominem attack. However, the genetic fallacy tends to focus on the history of ideas rather than the immediate origin of an individual’s ideas.

    Doug is one of those intellectual people – you know, the kind that thinks that logical fallacies and labeling something “leftist,” is an argument. That’s because he was once in the finance industry – as what a janitor or a bank teller?

    Doug writes: The NC Justice center is going in with their point first and making the facts fit their premise.

    Saying so and demonstrating it are two different things. For example, he could provide some contrary data and demonstrate the case. He doesn’t do that. The original report does not rely on “leftist” sources. If Doug would bother to look up that information, he would know that. The original report strikes me as very similar to one issued *by our own state.*

  5. jlp75

    May 8, 2013 at 12:46 pm


    I’ve found the rear orifice is the source of all of his “facts”.

  6. jlp75

    May 8, 2013 at 12:49 pm

    ” The NC Justice center is going in with their point first and making the facts fit their premise.” – Doug

    Well he probably figures since all of his right-wing sources use this tactic, everyone must. Such a sad world Doug lives in. Perhaps one day reality will come knocking on his door.

  7. Ken (EEI)

    May 9, 2013 at 10:54 am

    Doug’s comment below illustrates one of the biggest problems with the political process in the 21st century; lack of serious discourse. This shortcoming is prevalent on the political left as well as the right but in this case, Doug only seems interested in trolling around the Internet rather than citing facts that refute Allan Freyer’s article.

    Then again, maybe the reason that Doug didn’t offer any facts to refute Mr. Freyer’s article is that he couldn’t because the argument Mr. Freyer makes is too sound!

Check Also

Senate headed down the wrong path on state employee pensions, healthcare?

North Carolina’s state employees would see a bleaker ...

Top Stories from NCPW

  • News
  • Commentary

More than a month after a deadline to correct faulty campaign finance reports, N.C. Sen. Ralph Hise [...]

Even before he dropped the gavel on the Senate Finance Committee meeting, Sen. Jerry Tillman, a noto [...]

The $23 billion budget deal speeding through the N.C. General Assembly this week includes a platoon [...]

Royal Diadem Jewelers in Greensboro sets itself apart in a number of small ways - fast and friendly [...]

The final budget that lawmakers have proposed fails to strengthen the foundation of North Carolina’s [...]

Most of the initial headlines about the final budget agreement announced Monday afternoon by legisla [...]

Unexplained, backroom maneuver would rob already underfunded anti-poverty program There’s no denying [...]

Women and their access to health care has been in the news these past few months, as the plan to rep [...]

Featured | Special Projects

Trump + North Carolina
In dozens of vitally important areas, policy decisions of the Trump administration are dramatically affecting and altering the lives of North Carolinians. This growing collection of stories summarizes and critiques many of the most important decisions and their impacts.
Read more

HB2 - The continuing controversy
Policy Watch’s comprehensive coverage of North Carolina’s sweeping anti-LGBT law.
Read more