It bears repeating that the first rule of climbing out of a hole is to stop digging. But some policymakers obviously haven’t learned that lesson. They are pushing more tax cuts for those who need them least, even though revenue for schools and other priorities is coming in below projections because of tax cuts that have already gone into effect.
Last week Senator Berger laid out a tax plan that would allow profitable corporations to escape some of their responsibility for supporting the public services that benefit their businesses and the stability of the broader economy. The plan would do nothing to address the uneven recovery from the last recession, which has done nothing to boost the wages of most North Carolinians.
The senator said he will propose another round of corporate income tax cuts: reducing the rate to 3 percent from 5 percent by 2017 and changing the way profitable corporations account for their income for tax purposes. and Profitable corporations have already seen their tax rate drop from 6.9 percent, at a cost of nearly $350 million. Dropping the rate to 3 percent would mean roughly $500 million in additional revenue lost to the state’s schools, public health care and courts, to name just a few of the core public services that support opportunity for everyone in the state.
There is little hard evidence to support Senator Berger’s claim that corporate income tax cuts are a good strategy for boosting the state’s economy. Tax cuts to profitable corporations flow to shareholders and thus cannot be guaranteed to stay in the state and generate economic benefits for North Carolina. Read More