A report released today by the NC Budget and Tax Center highlights the Senate version of the House tax plan. Far from representing true tax reform, the tax plan would give massive tax cuts to the wealthiest North Carolina taxpayers and profitable businesses. Once all the tax cuts are fully in place, $1.3 billion less in revenue would be available to fund our schools and universities, public safety and other public investments that have positioned North Carolina as a leader among Southern states.
The BTC report highlights others aspects of the Senate tax plan worth noting. The plan does not address the state’s upside-down tax system, in which low- and moderate-income families spend a larger share of their incomes on state and local taxes compared to wealthy North Carolinians. Thus, the Senate plan will continue to ask more from those with the least amount of income and the wealthiest taxpayers will receive the lion share of the benefits of these tax cuts.
Eliminating the corporate income tax is unlikely to lead businesses to create more jobs, as proponents claim. The report notes that state corporate taxes on average make up less than 2 percent of total business costs and really do not affect corporations’ bottom lines. Eliminating corporate income taxes simply means that corporations will no longer be asked to help pay for many of the investments that help them thrive – like a skilled and educated workforce and quality transportation and infrastructure.
The title of the BTC report “Gambling Away Our Future” is befitting. A tax plan that funnels three quarters of the net tax cut benefits to the richest 5 percent of North Carolina taxpayers is not a plan that promotes economic opportunity for all North Carolinians and the loss in revenue puts at risk the foundations for economic growth. A future in which shared prosperity is more a reality than a talking point requires a sound rejection of the Senate tax plan.