Be sure to check out this morning’s Capitol Broadcasting Company editorial on WRAL.com, which explains the single best thing that the General Assembly could do before year’s end. After explaining that the state’s profitable corporations are about to receive yet another unnecessary tax cut in the New Year, “N.C. has greater needs than more corporate tax cuts” puts it this way:
In the next fiscal year, North Carolina’s corporations will likely pay about $598 million in income taxes. That is less than half the $1.4 billion they paid during the 2013-14 budget year.
Here’s the math. Right now, the income tax rate for corporations is 3 percent. Based on current collections, total taxable corporate revenue for the 2018-19 budget year will be about $23.9 billion resulting in income taxes collected at about $718 million.
On the first of the new year, the corporate tax rate drops to 2.5 percent. At that new rate, with the same taxable revenues, corporations will pay $598 million in state income taxes — $120 million less. That’s enough money for a 2 percent increase in public school teacher pay.
Corporate incomes tax collections are on track to drop 56 percent in the last five budget years. At the same time sales tax collections – taxes that fall disproportionately on those who struggle the most to pay them – will be increasing 32 percent.
Two years ago Gov. Roy Cooper rightly vetoed the budget bill containing these overly generous tax cuts. He called it a plan that “fails to fund promised teacher salary increases in future years along, with funding for early childhood education, community colleges and universities.”
The legislature then didn’t heed his call for “capping tax cuts so they benefit the middle class (and) investing more in public education.”
Gov. Cooper should renew his call to stop this latest tax cut before the legislative session ends. He needs, at a minimum, to call for suspension of the automatic corporate income tax cut. Better yet, he should call for its repeal.
Further, N.C. Chamber of Commerce President David Fountain of Duke Energy, should issue a statement saying that the Chamber, recognizing the critical unmet needs of the state, urges the legislature to repeal the additional tax cut. He knows the state’s corporations don’t need it and as good corporate citizens, businesses recognize they must do their part.
Neglect of the basic needs of citizens to cut corporate taxes is nothing short of malfeasance on the part of the legislature.
Legislators need to repeal this lavish tax cut now and focus on doing the jobs citizens expect done – educating children, maintaining an infrastructure that helps the state prosper, assure all citizens have access to health care and that they enjoy safe and clean communities.