NC Budget and Tax Center

Budget moves forward without acknowledgement of higher cost of tax plan

Over the course of the past three days, nearly 10,000 North Carolinians signed a petition calling on legislators to address the rising cost of the tax cuts that passed last year.  Tax cuts that primarily benefit wealthy taxpayers and profitable corporations.  The petition was delivered yesterday to legislators and yet early this morning the Senate approved a budget that fails to stop future tax cuts or address the growing gap between the priorities of the state and the adequacy of our revenue system.

PetitionDelivery

As the House debates the budget today, it is time to turn to the Governor for leadership on this issue.  He had early in 2013 committed to revenue neutral tax reform but as is increasingly clear the plan passed last year is not revenue neutral and is growing in cost.  The income tax cuts alone are projected to cost more than $5 billion over five years.  And it is quite possible, as we have written before, that the revenue shortfall for this fiscal year could be as high as $600 million.  That would mean the total tax plan would lose the state $1 billion in revenue each fiscal year.

Without those dollars it will be difficult for policymakers to meet the priorities of North Carolinians, sustain their plans for a teacher pay raise or ensure that North Carolina is on competitive ground and delivering a high quality of life to all.  Let’s hope the House rethinks the budget and if not that the Governor will lead the state down a more fiscally responsible path.

5 Comments

  1. Alex

    August 1, 2014 at 4:59 pm

    It is totally inaccurate to say that tax cuts impacted only the rich. Every working North Carolinian regardless of salary received a tax cut and more money in their pockets with every paycheck. The percentage cut applied to everyone equally so naturally the rich who were paying more in taxes to begin with got more dollars in absolute terms. At the same time the rich got socked with more federal taxes and additional Obamacare taxes.The argument is only intended for political purposes, and makes no sense otherwise.

  2. Susan

    August 1, 2014 at 5:50 pm

    The ones in the higher tax bracket were dropped to a much lower bracket…..even if the same bracket now that middle class is in.
    The $25.00 or so dollars I got in my monthly check I would have gladly given back to have safe roads and bridges and have our
    k-3 kids have an assistant helping their teacher in class.

  3. Alex

    August 1, 2014 at 7:17 pm

    I don’t think there any brackets in the state tax system. State taxes paid are now a flat percentage of the taxable income after deductions. There are spots on both state and federal returns to voluntarily pay more tax than is required so you may want to take advantage of that. Other people may rather have the additional funds in their pockets.

  4. Alan

    August 1, 2014 at 7:28 pm

    Glad to see Civitas is still handing out the talking points. Why is it that just about everything on this site “makes no sense”?

  5. Jack

    August 2, 2014 at 11:37 am

    so we are headed towards becoming the next Kansas as the claimed economic stimulus of cutting taxes does not result in increased tax revenue for the state. great.