Commentary, NC Budget and Tax Center

Powerful op-ed refutes Berger’s claims about a rosy NC economy

Be sure to check out NC Budget & Tax Center economist Patrick McHugh’s new op-ed in Raleigh’s News & Observer. In “As the NC GOP hails tax cuts, most incomes stagnate and poverty remains high,” McHugh offers a powerful rebuttal to a recent piece that appeared under the name of state Senate President Pro Tem Phil Berger, in which he attempted to claim that everything is going swimmingly with the North Carolina economy, thanks to GOP tax cuts.

Here’s McHugh:

Most families in North Carolina aren’t getting ahead in the way Berger is portraying it. The typical family income is slightly higher than it was in 2010 when we were just exiting the Great Recession, but the median income still buys less than it did at the turn of the Millennium. Our labor market is increasingly segregated between handsomely-paying white collar careers and low-wage jobs that don’t bring in enough to get by. We’ve lost many of the middle-income jobs that used to be the pathway from entry-level positions to a more comfortable life. Berger’s tax cuts haven’t fixed that problem.

The lack of good job opportunities has an even more devastating impact on communities and families trying to escape poverty. Our state has one of the highest rates of poverty in the country and last year (the most recent figures available) over 1.4 million North Carolinians were under the incredibly low threshold the Federal Government defines as the poverty line (less than $26,000 for a family of four).

Poverty is widespread but imposes a particularly harsh weight on some communities. One out of every five children in our state was in poverty last year, which should be enough in-itself to stop any elected leader from claiming their economic policies are working. We have also failed to dismantle the long-standing obstacles to opportunity which trap Black and brown North Carolinians in poverty far more often than their white neighbors.

North Carolina’s economic growth under the current tax cutting regime has been remarkably unremarkable. Job growth since 2010 has been identical to the regional average and slower than South Carolina and Georgia. The low tax mantra is also hard to square with the fact states along the West Coast which aren’t as allergic to taxing wealthy people and corporations added jobs faster than North Carolina over the last decade. Clearly having the lowest corporate tax rate in the country hasn’t propelled us to the lead of the pack.

Meanwhile, as McHugh points out, repeated tax cuts are devastating core state services and structures that boost the middle class. McHugh’ on-the-money bottom line:
Senator Berger isn’t alone in spinning stories to defend his policies. The real question is how much truth gets sacrificed, and the consequences to people whose lives are written out of the story.
Click here to read the entire essay.

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