North Carolina Budget and Tax Center director Alexandra Sirota is out with a new BTC Brief that ought to be a “must read” for all state lawmakers as they prepare for the 2018 legislative session that commences next month. In “Love NC? Fund NC.” Sirota explains why it is essential for lawmakers to revisit their plan to inflict a new round of destructive tax cuts on the state in 2019. This from the introduction:
“As the General Assembly returns for a short legislative session, their primary focus should be addressing the impending cuts to corporate and personal income tax rates in January 2019. After successive rate reductions on the income tax side since 2013 — which primarily benefited wealthy taxpayers and large, profitable corporations — the state of North Carolina is poised to continue to reduce its investments in people and places and leave needs unmet again this year.
Scheduled rate reductions for January 2019 will put the state’s budgets out of balance in future years, requiring cuts to investments in public health, environmental protections and education, failing to keep higher education affordable and K-12 classrooms and schools funded to serve each child. North Carolina will lose roughly $900 million over a year in revenue from the reduction of the corporate income tax rate to 2.5 percent from 3 percent and from the flat personal income tax rate falling to 5.25 from 5.499 percent.
At this point in the state’s failed tax-cut experiment, it is time to return to an approach that prioritizes investments in people and places over tax cuts for corporations and the wealthy. Evidence shows it will not only strengthen the connection to prosperity for more people and places but will also grow the economy in more inclusive and sustainable ways. It will also ensure that the state is pursuing a fiscally responsible path in light of its long-term needs and the uncertainty of federal fiscal policy.
Removing the scheduled tax cuts from statute this session is the first step to ensure that North Carolina can adequately invest in its future, strengthen the economy for the long-term and prepare for likely external shocks to the state’s economic and fiscal health.”
Click here to read this rest of this very important report.