If you missed it, be sure to check out the editorial that ran in both the Greensboro News & Record and Winston-Salem Journal in recent days pleading with state lawmakers to halt the latest scheduled reduction in the corporate income tax rate.
The editorial cites a recent report by the N.C. Budget and Tax Center entitled “Corporations over Carolinians?” to support its argument. This is from the editorial:
“As a result of the legislature’s reduction of the corporate tax rate from 6.9 percent in 2013 to 3 percent in 2017, the state has taken in $600 million less in taxes. That hurts, for one thing, our ability to educate our children. It’s difficult to accept further corporate tax cuts when our schools are suffering from a lack of resources.
The report also notes that previous cuts may not have been as beneficial as they were portrayed. North Carolina’s job-creation record — 77,200 private-sector jobs since April 2017, up 2.1 percent — ‘is virtually indistinguishable from the average growth rate for the South Atlantic region, including Florida, Georgia and South Carolina, none of which have engaged in a rash of tax cuts in recent years.’
Many economists say much of North Carolina’s recovery has come from piggybacking on the U.S. recovery.
The report also notes that previous tax cuts, including last year’s federal cut, have failed to ‘trickle down’ to workers. Forty-six corporations devoted at least 51 percent of that cut to shareholders — and some, such as Bank of America Corp. and Wells Fargo, more than 90 percent. Bank of America Corp. has dedicated only 8 percent of its cut toward its employees, and Wells Fargo 1 percent. To their credit, 31 percent and 4 percent, respectively, is going toward community philanthropy.”
Here’s the on-the-money conclusion:
“It’s typical to grumble over taxes. But, as Supreme Court Justice Oliver Wendell Holmes Jr. said, ‘I like paying taxes. With them, I buy civilization.’ With our taxes, we buy police and fire protection, safe roads, economic development, schools and social programs that help those who need assistance, among other societal goods.
Corporations aren’t going to pay for our roads or our schools with their tax-rate cuts.
Even if we only consider our schools, which are seriously underfunded, they should take priority over another corporate tax rate cut.”