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Top of the morning

Posted By Chris Fitzsimon On August 12, 2013 @ 8:46 am In Top of the Morning | Comments Disabled

sun145 [1]The 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 [2] 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 [3] 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.


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[1] Image: http://pulse.ncpolicywatch.org/wp-content/uploads/2011/07/sun1453.jpg

[2] Charlotte Observer analysis: http://www.charlotteobserver.com/2013/08/11/4228287/nc-tax-changes-where-you-stand.html

[3] July column: http://www.newsobserver.com/2013/07/27/3062728/the-north-carolina-way-takes-a.html

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