Tag: economy

Local School Systems Face Challenging Budget Environments for Upcoming School Year

April 16, 2013 at 9:07 amCategory:NC Budget and Tax Center

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As local school boards begin to plan K-12 budgets for the coming school year, they continue to feel the squeeze from a still-fragile economy and continued cuts in state support for public education. Since FY2009, state support for K-12 education has been cut by more than $1.3 billion and Governor McCrory’s proposed budget for FY2014 continues this trend with $85 million in cuts to K-12 education.

The budgeting environment will likely be even more challenging for the upcoming school year with the expiration of one-time federal funding. North Carolina received $297 million in federal dollars for K-12 education (“Ed Jobs” funding) as part of the American Recovery and Reinvestment Act approved by Congress in 2010. All local school systems received Ed Jobs funding, which was used to retain existing employees, recall or rehire former employees and to hire new employees. Local school systems were required to spend all Ed Jobs funds by October 2012 and no additional funding will be available for the upcoming school year. Read More…

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…

Tax Cuts a Poor Strategy for Growth

March 21, 2013 at 11:12 amCategory:NC Budget and Tax Center

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Some members of General Assembly have repeatedly claimed that elimination or deep cuts to personal income tax rates, especially on high-wealth individuals can solve our high unemployment and sluggish economic growth.

New research from the Center on Budget and Policy Priorities released this morning finds that pursuit of such policies are not worth the risk.

After comparing the economic performance of those states that pursued deep cuts in the 1990s and 2000s and those that did not, it turns out high tax cut states have grown far slower. Read the full report for details.

 

Another reality check on spending and deficits

March 18, 2013 at 8:25 amCategory:Uncategorized

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Dean BakerOne of the country’s keenest economic policy observers, Dean Baker, has an excellent take down of Washington Post columnist Robert Samuelson’s latest demands that the U.S. slash social spending this morning at the Center for Economic and Policy Research website. His message: America’s obsession with near-term deficits remains utterly illogical and counterproductive: 

“First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits….

…In fact, according to the Social Security Trustees projections, Read More…

Another reason slashing corporate taxes ain’t the answer

March 11, 2013 at 2:09 pmCategory:Uncategorized

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Not that very many people with any common sense really believe that cutting taxes on corporations and the wealthy would really jump-start the North Carolina economy, but here’s some additional info that places this patently absurd idea in its proper light.

As reported today by Travis Waldron at Think Progress:

“Even as American corporations are raking in record profits, the largest among them are shifting larger amounts of money away from the United States and into offshore tax havens that allow them to pad their bottom lines even more, according to multiple analyses of legal filings made since the beginning of 2013.

The Wall Street Journal found that the 60 largest companies moved $166 billion offshore in 2012, shielding 40 percent of their earnings from American taxes and costing the U.S. billions in lost revenue.”

Got it? The problem is not lack corporate profitability; it’s lack of demand from cash-strapped, debt-strapped consumers. Generally speaking, businesses generally have plenty to invest, but are holding back or squirreling money away because they don’t perceive a demand for the products and services they might produce. Cutting taxes and public spending further just perpetuates the vicious and destructive cycle in which we are already stuck.