Top of the Morning

Top of the morning

sun145The debate rages on about the tax cut for millionaires passed by the General Assembly and signed by Governor Pat McCrory, breaking a campaign promise that any tax reform would be revenue neutral.

A Charlotte Observer analysis of the tax plan included this from Rep. Ruth Samuelson, who reportedly wants to succeed Thom Tillis as House Speaker.

State Rep. Ruth Samuelson, a Charlotte Republican, said she’s certain the tax cuts will spark more than enough economic growth to balance out the revenue lost. She said the cuts should give North Carolina an edge in the chase for corporate relocations.

The assertion that tax cuts for corporations and wealthy individuals will spur massive new job creation is a common refrain of supporters of the General Assembly’s tax shift, though most lawmakers don’t generally claim it is a certainty.

Dr Michael Walden knows a lot more about economics that Rep. Samuelson. He’s a PhD economist at N.C. State and even an adjunct scholar at the Locke Foundation, where Samuelson and her GOP colleagues so often get their talking points.

Here’s Walden in a late July column by Rob Christensen of the News & Observer.

But the legislature’s reliance on huge tax cuts is a major gamble for the state. Michael Walden, an economist with N.C. State University, said that while everyone likes to pay less tax, there’s little evidence that lower taxes will actually have much of an effect on the state’s economic growth….

….So will the cut in state taxes set off an economic boom in North Carolina? I would say based on the literature that I have looked at, which is extensive, no.”

That seems pretty clear.  Now folks have to decide who they believe more, a conservative senior economist or a politician interested in higher office.

5 Comments

  1. Jack

    August 12, 2013 at 9:19 am

    Whether it called trickle-down economics or supply-side economics it doesn’t work. It didn’t in the 20th Century and it won’t work in the 21st.

  2. Alan

    August 12, 2013 at 9:38 am

    But if we keep telling people that tax cuts mean job growth, over and over again, then surely it must become true at some point??? It’s all about selfishness and the worst of human greed. The folks spinning this nonsense know it doesn’t work either, but why let something like facts get in the way? Or, alternatively, are they really that dumb?

    The GOP has turned NC into a national, and international embarrassment.

  3. Doug

    August 12, 2013 at 10:28 am

    Dont forget the tax cuts for most in NC and the fact that people under the $67,000 down to the 0% tax bracket will pay less than $134 per year at the highest of those brackets….per your own analysis. I for one am glad to spend that extra $12 per month to help the state of NC do things like over-fund education by approximately 2.2% or rougly $200 million.

  4. gregflynn

    August 12, 2013 at 2:06 pm

    The original “analysis” showed that people under $67K would be paying more in taxes while those above would be paying less. The $134 was your own interpretation of how much more people earning up to $67K would pay in addition to what they pay now. It’s a tax increase for lower incomes, not a tax cut.

  5. Alan

    August 12, 2013 at 3:43 pm

    Doogie has a problem with facts/data/stats, I guess it must be a quiet day for him in the Civitas office.