An article in today’s N&O highlights some important and sobering facts regarding the costly tax plan proposed by the state Senate. Most notably, the article points out that the NCGA’s Fiscal Research Division estimates that the Senate tax plan would create a hole in the state budget to the tune of nearly $600 million within the next three years.
Plugging this budget gap will likely mean state funding cuts to public schools, healthcare services, environmental protection and/or other areas of the state budget needed to pay for the tax cuts. Regarding the budget hole that the tax plan will create, Senator Jerry Tillman – a co-sponsor of the Senate tax plan and co-chair of the Senate Finance committee – is quoted in the N&O article as informing the public that “there are budget areas that can be cut as well as reserves that could be tapped.” Thus, cutting important public services to pay for more tax cuts is not a far-fetched idea, but rather a planned go-to option for proponents of the tax plan.
BTC’s analysis of the Senate tax plan shows that the tax cuts are not in fact targeted to middle class tax payers. Nearly half of the total net tax cut under the proposed tax plan would go to the top 20 percent of income earners in the state. By contrast, only 29 percent of net tax cut benefits would flow to the bottom 60 percent of income earners – those with incomes of $57,000 or less. Furthermore, a significant share of the net tax benefit will flow to profitable multistate corporations.
The N&O article makes it very clear: Proponents of the Senate tax plan are more than willing to give more tax cuts to the already well-off and profitable corporations at the expense of public investments that promote broadly shared prosperity. This is state leaders’ brand of tax reform, which doesn’t look like it ends well for the majority of North Carolinians.