If you listened to Governor McCrory’s press event on Tuesday, you might be a little confused about the tax plan that pasted last year and what it means for our state.

Tax reform should be about modernizing the tax code in a way that ensures the system can continue to serve its fundamental purpose: providing enough revenue to support core public services. It should also be ensure greater revenue stability while not asking more from low- and middle income taxpayers as a share of their income than from wealthy taxpayers.  But all three of these principles of a sound tax system will be compromised under the tax plan passed last year.

Here are half dozen things that you should know that you didn’t hear at Governor McCrory’s press event: Read More

In North Carolina, a singular focus on comparing the state’s income tax rates to other states was used to justify massive rate reductions in the 2013 tax plan.  But do tax rates determine whether a state is competitive?

It turns out that income tax rates do not indicate competitiveness of a state’s tax code for two reasons:

  1. The vast majority of people and business make decisions based on other factors
  2. Tax credits and deductions mean that few pay the full income tax rate. Read More

The last weekend before Tax Day is here and in the last minute rush to get your returns in, it can be helpful to reflect on why taxes matter.  Taxes are as some have said “the price we pay for civilized society” and more simply the way in which we invest together in building a stronger state through the creation of opportunity and establishment of a basic quality of life for all North Carolinians.

In the aftermath of the disastrous tax plan that passed last year, just how taxes play a role in our everyday lives has become clearer.  Taxes make it possible for our children to have a quality classroom experience, taxes fund monitoring and inspection that protect the quality of our water, taxes build the infrastructure that connect workers to jobs and support business in job creation.  And yet, the tax plan has created a self-imposed budget crisis that will undermine our ability to invest in these foundations of a strong economy.

Beyond that fundamental role of funding core public services, who pays under the tax code matters too.  And the tax plan passed last year makes an already upside down even worse: low- and middle-income taxpayers pay more as a share of their income than wealthy taxpayers.  This not only hurts families who are trying to make ends meet on falling or stagnating wages, it compromises the long term ability of the tax system to fund public services since it taxes where the income growth is not occurring, which creates a gap as needs increases but revenue can’t keep up. Read More

Earlier this week the Budget & Tax Center released an analysis of the economic and fiscal impacts of providing all drivers a license regardless of immigration status.  The findings suggest that more than 250,000 undocumented immigrants could be eligible for a license and their children too.  The net fiscal impact of issuing these licenses would be minimal, based on experiences in other states, and estimated revenue from fees could likely cover the cost of providing the licenses completely.

For years, North Carolina has been at the forefront of adopting measures that improve safety on the roads, from graduated driver’s licenses for first-time drivers to texting bans to strict requirements on the transportation of children. But one simple measure has been ignored: ensuring all drivers have a driver’s license, regardless of their immigration status.  In fact, since 2006, North Carolina has adopted more stringent identification requirements that effectively banned undocumented immigrants and others from obtaining a license.  This movement is in the opposite direction of the now 12 states that have expanded access to driver’s licenses recognizing the public safety benefits to having all drivers tested and insured.

Beyond providing greater assurance for all drivers that those on the road are tested, licensed and insured, driver’s licenses provide an important ability for workers to get to their jobs particularly as car travel is the dominant mode of transportation in North Carolina.  This increased mobility will likely lead to greater consumer spending, a more reliable workforce for employers, and a net benefit to the economy.

Yesterday, the Budget & Tax Center released a report on the number of North Carolinians who would have been working or seeking work if the Great Recession had never happened and job opportunities had remained strong over the last five years.  The report highlights using this new measure the troubling trend of too few jobs and workers leaving the labor force.  In addition, it pulls together compelling national research finding that most or all of the labor force decline is driven by a weak labor market.  Among the key findings:

  • 250,000 North Carolinians are missing from the labor force
  • If those missing workers were counted as unemployed, the unemployment rate would be nearly double the official rate for February 2014.

The report comes as national economists gathered this week to push for a full employment agenda, one that would seek to expand job opportunities and bring more folks into the labor market to support a stronger economic growth trajectory.  As attention nationally turns to the issue of persistent joblessness and the harm it is creating for workers and the economy, it is important for North Carolina’s policymakers to focus on good quality job creation and policies that support strong connections to the labor force for workers in a weak labor market.