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Commentary, NC Budget and Tax Center, Raising the Bar 2015

Raising the Bar in North CarolinaEditor’s note: The following post by Beth Messersmith, NC Campaign Director with MomsRising.org, is the latest installment in “Raising the Bar,” a new series of essays and blog posts authored by North Carolina leaders highlighting ways in which North Carolina public investments are falling short and where and how they can be improved.

This week found my husband and I scrambling to make sure we had all of our I’s dotted and our T’s crossed as we hurried to make sure we had our taxes filed on time.

As he sat watching us from the couch, my almost ten-year old remarked about what a bummer it is to have to pay taxes. His sister stopped doing cartwheels across the living room long enough to agree and opine that she was glad that she didn’t have to pay them out of her allowance.

I guess I shouldn’t have been surprised. Anti-tax rhetoric is everywhere in the weeks leading up to tax day. Just that morning on the way to school the deejay on the morning radio show was talking about how much he hates paying taxes.

But their remarks were enough to make me stop my hunt for receipts and pull the kids onto the couch to talk to them about why —as a parent and a part of this country —I don’t mind paying taxes. In fact, I see it as part of my duty as someone who loves this country and benefits every single day from the investments we make as a society. And why, as a parent, I feel especially grateful for the investments we make in our children.

We started off by talking about their schools and the things that make schools work. They listed off their teachers, their supplies, the buses, even the buildings. Then I asked them who they thought owns our schools and employs our teachers. They’d never really thought about it. Explaining it to them gave me a chance to talk about how taxes are actually investments in our community and, in the case of schools, in the futures of the children who attend them. I shared how I benefited from public schools even before they were born as a student myself, as an employer looking to hire qualified people, and as a community member who benefits from an educated society. Read More

NC Budget and Tax Center

For those wonks out there following the details on how these tax plans are going to impact North Carolinians across the income distribution we have put together this short piece on the different tools that can be used to describe who pays. By far, the economic incidence model is the best way to estimate population-level impacts.  That is the model that the Budget & Tax Center has used.

While some have said that these tax plans benefit everyone based on what will happen to select individual taxpayers, it is important to be clear that some will see their taxes go up. The infographic below shows just a few examples of who those taxpayers could be.

infogrfk- House-Senate Plan_Layout 1

Most importantly, though, the debate over who will be impacted by tax changes should be grounded in the best available tools and an economic incidence model can give us the best information about how the population overall will fare after tax changes have been made.

NC Budget and Tax Center

The Senate’s historically unprecedented $1 billion-a-year tax cut passed out of the Finance Committee yesterday, moving steep reductions in personal income tax rates and outright elimination of the corporate income tax one step closer to becoming law.  While legislative leaders spoke glowingly about reducing North Carolina’s income tax rates to below those in other southeastern states, they remained conspicuously silent on how those other states have dealt with keeping their own income taxes so low–by increasing property taxes or sales taxes (or both).

This raises an important question—will North Carolina’s state income tax cuts simply lead to higher property taxes and sales taxes?

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