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State income tax cutsMichael Leachman, one of the top fiscal wonks at the D.C.-based Center on Budget and Policy Priorities authored a very compelling post yesterday that makes clear why cutting (or, God forbid, eliminating) the state income tax is not the right path for North Carolina.

Leachman writes:

“A number of states, including Arkansas, Kansas, Missouri, North Carolina, Ohio, and Wisconsin, are considering deep cuts in personal income taxes to spur economic growth. But both recent history and empirical studies suggest that this approach doesn’t work particularly well, as our new report explains.

First, let’s look at recent history.  Of the six states that cut income taxes sharply between 2000 and 2007 (when the recession hit), three grew more slowly than the rest of the country in the years that followed.  The other three saw above-average growth, but they are major oil-producing states (Louisiana, New Mexico, and Oklahoma) that benefitted from a sharp rise in oil prices. Read More

Bobby JindalA politically insightful friend shared a rather fascinating take of the polling data surrounding Louisiana’s once-popular governor, Bobby Jindal. North Carolina’s governor might want to take notice:

“A word to the wise.  Before ending Medicaid expansion and the state’s income tax, Governor McCrory might want to check in with his buddy, Louisiana Governor Bobby Jindal. Once the most popular governor in the nation, according to Public Policy Polling, Jindal’s approval ratings have fallen dramatically—from a 58% approval rating in 2010 to 37% approval this month, including a 25% drop in support from Independents.  Read More

Art popeToday, Governor, er ah, State Budget Director Art Pope told reporters at an event in Chapel Hill that eliminating the state personal and corporate income taxes is “a bad idea.” Earlier this morning, in concert with scores of other reports and blog posts it has distributed in recent years, the Pope-Civitas Institute (which Pope funds almost exclusively) distributed an article entitled: “Why All U.S. States Should Eliminate The Income Tax.”

Any more questions as to why so many are so concerned about Pat McCrory’s decision to invest such power in this individual? How do we (and the members of the General Assembly — many of whom he helped put in office with campaign contributions and personal, direct participation in drawing the electoral maps under which they were elected) know what his real position is? And how will those lawmakers hold the Budget Director’s feet to the fire (as is their job) under such circumstances? 

One final word: This is not a “personal attack” as Pope keeps labeling the criticisms that Policy Watch and others have directed his way. I’m sure Pope loves his family and is sincere in his beliefs. There is no evidence that he is trying to enrich himself directly with public dollars.

This is an attack on the destructive ideology to which he gives voice and power and the unprecedented position he has assumed in our state as both a powerful state official and the chief funder of a movement, a party, and an array of far right nonprofits.

At some point, it seems, conservative ideologues and their friends in Congress will simply get down to admitting that what they have in mind for the American tax code is the following simple situation:

The wealthy will simply pay no income taxes, capital gains or estate taxes of any kind.  Meanwhile, average working people will be called upon to bear an ever-greater responsibility for funding essential public services and structures — or, at least, the services and structures that conservatives are willing to allow to continue and/or farm out to corporate interests.    

The latest example of this inevitable trend in motion can be see in this new proposal from U.S. Senate conservatives.

 

Later this evening, the U.S. Senate will vote on the so-called Buffett Rule, an Obama Administration proposal that seeks to ensure that households earning more $1 million a year pay at least the same tax rate as middle class families.  Introduced as S.2230, “The Paying a Fair Share Act,” by Senator Sheldon Whitehouse (D-RI), this important legislation promotes tax fairness, a balanced first step to deficit reduction, and long-term economic growth.

Under the current Bush-era tax levels, individuals earning more than $1 million per year face a tax rate of 35% for wage income, yet between a range of loopholes, deductions, and preferential treatment of investment income, many of these wealthy individuals are able to shield vast portions of their earnings from Federal income tax—thus reducing their effective tax rates to levels lower than the tax rates faced by middle class families.  One recent study showed that more than one-quarter of all millionaires pay less than 26.5% of their income in federal taxes, while 10 million Americans earning less than $100,000 pay more than 26.5% in taxes.

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