fbpx

It’s Throwback Thursday with More Tax Cut Proposals

For Throwback Thursday, the Senate is relishing in old school ideas.

Case in point, a bill was filed today to further cut income taxes for profitable corporations and continue to reduce the flat income tax rate that benefited the wealthiest taxpayers the first time around. It is an eerily similar approach as the legislation passed in 2013, which is now hurting our state and economy.

Income tax cuts like the one proposed in today’s throwback are not the answer to the state’s economic challenges. Just ask Senator Brown who is working to secure additional sales tax revenue for rural counties that have been hit hard by the 2013 tax changes which ultimately reduced state investments in public schools and economic development. Take a look at the academic research which finds no consensus on tax cuts benefiting the economy through job creation or increased incomes. Or consider the experiences of states’ like Kansas where income tax cuts have not delivered a boost in jobs or wages but have resulted in cuts to core services.

The continued pursuit of income tax cuts will not boost North Carolina’s economy, it only serves to further reduce revenue that pays for services that people rely on each day, like our schools.  Preliminary estimates suggest the cost of this bill would be $1 billion, on top of the nearly $1 billion price tag of the tax changes passed in 2013.

One major beneficiary of these tax cuts will be profitable corporations.  Profitable corporations benefiting from the rate reductions and adoption of Single Sales Factor aren’t likely to invest those dollars back to North Carolinians and therefore are unlikely to generate jobs in the state.

To truly be competitive in our region and our nation, North Carolina shouldn’t look back to the failed ideology of trickle-down economics. We should instead focus on the proven track record of smart public investments that support and grow the economy. This won’t happen as long as our leaders remain fixated on old throwback ideas.

This blog post was revised on 3/28/2015 from its originally posted version to reflect emerging analysis of the Senate tax cut plan.

 

Load More Related Articles
Load More By Alexandra Sirota
Load More In NC Budget and Tax Center

Top Stories from NCPW

  • News
  • Commentary

WASHINGTON — Another grueling summer disaster season is arriving, and the Federal Emergency Management Agency is… [...]

Duke Energy's proposed carbon reduction plan calls for steep cuts in carbon dioxide, a major greenhouse… [...]

Five Republicans vying to win control of Durham’s progressive school board were soundly defeated in Tuesday’s… [...]

State Sen. Valerie Foushee of Orange County won the Democratic primary for the open seat in… [...]

As most voters have shown they understand, Roy Cooper has been one of the best governors… [...]

We had been married a little over a year when I had an abortion. Put down… [...]

The post Not a good fit. appeared first on NC Policy Watch. [...]

During a 2014 symposium marking the 60th anniversary of the Brown v. Topeka Board of Education… [...]