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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.

Last week, the General Assembly’s Revenue Laws Study Committee met to consider changes to the state’s corporate tax rules that could put a serious dent in the corporate tax revenues needed to pay for public schools, community colleges, Medicaid, and other vital public investments in the coming years.

The bottom line (as explained in this space before) is that a subset of profitable multi-state corporations are pushing to be absolved of past abuses of corporate tax shelters whereby these corporations used accounting games to shift taxable profits earned here in North Carolina to no-tax states like Delaware and Nevada. If these corporations get their way, the result could be a $350 million windfall for a few dozen profitable corporations paid at the expense of everyday North Carolinians and locally-owned businesses.

Why would lawmakers even be considering such a costly giveaway?

As the video below shows, the complexity of corporate tax laws gives Washington, DC-based lobbyists with corporation-funded groups like the Council on State Taxation the opportunity to convince lawmakers to make innocuous-sounding changes that would have costly consequences. A better path would be combined reporting, which ensures all corporations pay their fair share.

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