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NC Budget and Tax Center

The North Carolina Senate’s tax reform plan released today is long on promises and short on details. It is unclear how fair the purported “Tax Fairness Plan” will prove to be. Several red flags are raised by this plan, which should raise the alarm for all those concerned with a budget and tax system that supports economic opportunity and the foundation of economic growth.

One red flag is the surprising lack of details about how tax cuts will be offset by expanding the sales tax base enough to keep our vital services and infrastructure in place.

Another red flag is that this plan does not purport nor attempt to raise the same level of revenue as the state is currently taking in. The plan as outlined by Senator Berger will result in at least one billion dollars in revenue loss—revenue that could be dedicated to important and necessary services and infrastructure in the state. For example, one billion dollars is equal to the entire community college system budget in North Carolina. Read More

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One of the few points of consensus that the right and left can come to on North Carolina’s tax system is that it’s badly in need of fixing.

The particulars how to do that, and how much taxes different groups should pay, widely differs from that point on, and were the topic of a luncheon debate this afternoon on N.C. State University’s campus and hosted by the N.C. Institute of Emerging Issues, the conservative Civitas Institute and the N.C. Justice Center’s Budget and Tax Center.

Wonky terms like regressive, progressive taxes and supply-side tax policy were tossed around, in the context of a larger conversation about what slashing taxes can do to a community.

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STATEMENT FROM THE N.C. BUDGET & TAX CENTER:

Senate tax proposal shifts burden from the rich to the poor

RALEIGH (May 7, 2013) — The Senate leadership has released a proposal that will harm working families and the broader economy.

By cutting income taxes and expanding the sales tax to more goods and services, the Senate leadership has pursued a shift in tax burden from the rich to the poor, not tax reform. The result is a plan that not only requires low-and middle-income families to pay more while the highest income families pay less, but also reduces the state’s ability to invest in a foundation for economic growth by cutting state revenues by $1 billion each year. That is equivalent to the entire community college system OR the combined budgets of the DHHS Divisions of Aging, Child Development, and Child Health and the Judicial Branch and NC Biotechnology Center.