Tag: corporations

Georgia’s failed tax reform effort holds a warning for North Carolina

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May 9, 2013 at 1:06 pmCategory:NC Budget and Tax Center | Uncategorized

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This is the first of a four-part blog series presenting voices from other states that have unsuccessfully pursued versions of comprehensive tax “reform.”

gbpi

Commentary provided by Alan Essig, Executive Director of the Georgia Budget and Policy Institute in Atlanta, GA.

As North Carolina considers major tax reform, it’s useful to take a look at a similar effort in Georgia a few years ago, because what started out as a plan to overhaul the state’s tax system in a responsible way that preserved important state investments quickly devolved into a proposal that put ideology and politics above the welfare of Georgians.

The core of Georgia’s problem was similar to what you are now seeing in North Carolina: the pursuit of drastic income tax cuts paired with a failure to replace this with another revenue source makes it impossible for a state to provide the services that people and businesses depend on every day, like roads, schools, and safe communities. Georgia wisely chose to reject such a proposal in 2011, just as North Carolina should this year. Read More…

U.S. Senate bill would require online retailers to collect sales taxes

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May 6, 2013 at 2:19 pmCategory:NC Budget and Tax Center

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Today the United States Senate is scheduled to debate and possibly vote on a bill titled the Marketplace Fairness Act of 2013, which would authorize states to require businesses to collect state and local taxes for products sold via the internet. Currently, states can only require retailers to collect sales taxes if a respective business has a physical presence in a state. And while the tax is still legally due to the state regardless of whether sales occur on-line, consumers don’t always know or comply with this requirement.  

As internet sales have steadily grown as a share of total retail sales, state and local government sales tax collections have been impacted. For 2012, internet sales in the U.S. totaled $226 billion, an increase of nearly 16 percent compared to 2011, according to estimates by the U.S. Department of Commerce. Read More…

New report documents folly of cutting corporate taxes

April 18, 2013 at 5:07 pmCategory:Uncategorized

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The wonks at the Budget and Tax Center are out with a new report — “Cutting corporate income taxes won’t be an economic boon for North Carolina” – that ought to be a “must read” for state government leaders.

It lists three top reasons for not cutting corporate taxes:

  1. Corporate income tax cuts don’t pay for themselves and put key investments at risk.
  2. A very small share of corporations would benefit.
  3. Corporations are unlikely to expand or relocate because of state income tax cuts

It’s a quick, too-the-point read that you should check out too. Click here to do so.

Our newest corporate tax avoider profile

April 12, 2013 at 3:00 pmCategory:Uncategorized

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In the third installment in our three-part series on corporate tax avoiders with strong connections to North Carolina, NC Policy Watch has released a profile of International Paper, Co.

Here are some of the fast and disturbing facts on the giant multi-national (the largest company of its kind in the world) that owns 18 separate facilities in North Carolina:

  • Total assets $27 billion
  • 2008-2012 profits combined: $2.8 Billion
  • Net 2008-12 federal tax rate: 2.6% (the offical corporate tax rate is 35%)
  • 2008-2012 federal taxes paid: $74 million (if paid at the 35% rate, this figure would have been $980 million)
  • Five-year compensation of CEO John Faraci (as of April 2012):  $49.3 million

Read more about International Paper (as well as two other large tax avoiders — Duke Energy and Merck & Co.) by clicking here.

Corporate Income Tax Cuts Would Harm, Not Help State’s Economy

April 11, 2013 at 9:15 amCategory:NC Budget and Tax Center

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North Carolina lawmakers are barking up the wrong tree when they claim that corporate tax cuts, such as those proposed in the state Senate, will spur job creation and economic growth. In reality, those tax cuts will do more harm than good, in both the short- and long-term.

Every dollar that Senate Bill 677 would give away in a tax cut has to be made up for with a tax increase on another business or individual or with cuts to schools, health care and other vital services that provide a strong foundation for our economy.

This tax plan would cost the state $344 million once the tax cuts were fully phased in, according to the Legislature’s Fiscal Research Division. Read More…