As we wrote yesterday, the joint tax plan negotiated by leaders in the House, Senate and the Governor is a bad deal for North Carolinians.

Here is why:

• The joint tax plan is a big tax cut for those at the top.  Those with average incomes of nearly $1 million would receive a total tax cut of nearly $10,000.
• When compared to the current experience of taxpayers now with a state Earned Income Tax Credit in place, the plan represents a tax shift to low- and middle-income taxpayers.  The bottom 80 percent of taxpayers would experience an increase in their taxes on average.
• The corporate income tax reduction will still overwhelmingly benefit shareholders out of state.
• When fully implemented the tax plan results in a revenue reduction compared to current law of more than $600 million.

Comprehensive tax reform means addressing the problems with our tax code: that it is not aligned with the economy, that it is upside-down and unable to support the changing needs of our growing population and economy.  This tax plan makes these problems worse.

This is a bad deal  for North Carolinians.  What the Governor and Legislature agreed on won’t support job creation  and it will drain resources needed to bolster our economy.

It puts at risk the ability to educate our children, care for our elders, keep our communities safe and support businesses, while failing to fix the problems with the state’s tax code. And, it gets rid of policies that work such as the Earned Income Tax Credit.

This is not a historic day for North Carolina; tax reform hasn’t been achieved.  Instead, we’ve been handed a plan that will tarnish our state’s reputation as a leader in the South, a place where people want to live and businesses want to grow.

It is very likely that as a result of this failure to pursue real, comprehensive tax reform, state sales taxes and local property taxes will go up in the future.   That’s what happened in every other Southern state that has personal and corporate income taxes that can’t keep up with growing public needs.

Our state cannot be competitive nationally or internationally with this reckless approach. It undermines the education of our workforce and support for research and innovation.  The prospects of an ongoing race to the bottom for North Carolina now are all too real.

The same anti-tax activists who want North Carolina to import an agenda of steep tax cuts that will benefit the wealthy at the expense of everyone else now want you to believe that North Carolina would be better off if it were more like Wisconsin. That’s because Wisconsin went down the same road two years ago.

But while Grover Norquist and Patrick Gleason sang the praises of the Wisconsin experiment in a recent opinion piece, a look at the chart below shows the Badger State has taken a sharp turn for the worse since following the advice of the tax-cutting lobbyists.

Wisconsin has fallen out of step with the nation’s already too weak rate of job recovery. And Wisconsin job growth went off the rails just as the Governor’s new budget and new policies were going into effect. There’s precious little to celebrate about Wisconsin’s economy looking at that divergence.

Norquist and Gleason point to a dip in Wisconsin’s unemployment rate and that state’s budget surplus. But unemployment rates can drop without jobs being created when discouraged people give up looking for work.  And surpluses can swell when you spend less than is needed for schools, health care and other vital services that bolster the economy in the long run.

It’s clear that the political spin has reached fever pitch in recent days as  reality sinks in about  what the proposed approach to tax and budget decisions by North Carolina’s Legislature  would really mean: tax cuts for the richest, tax hikes for the rest and fewer resources to invest in our state’s future.

The  thousands of diverse residents raising the alarm about  the proposal  can’t bode well for its supporters.  Nor can the concerns being voiced  by local elected officials, wealthy taxpayers and business leaders. North Carolina has a long way to go to recover the jobs it has lost, and the chance of falling further behind is  a risk we shouldn’t want to take.

The tax cuts the Senate passed today would put our schools, public safety and other vital investments in North Carolina’s future at risk, while giving the state’s wealthiest residents and profitable corporations a substantial tax break.   Despite misleading claims to the contrary, this plan  would sharply curtail future revenues —by almost $1 billion annually, according to estimates by the General Assembly’s own Fiscal Research Division. Such a loss would make it more difficult for the state to recover from the already damaging cuts that have been made to education and other services over the course of the Great Recession and recovery.  To try to make the math add up, the Senate proposal would also raise taxes on middle-class and low-income  taxpayers.  This is not a recipe for economic competitiveness or growth.  North Carolinians and our state’s reputation for innovation will suffer if it becomes reality.

For our analysis of the plan, see here.