BTC BRIEF: The Oft-Ignored Part of the Temporary Tax Package - Continuing High-Income and Corporate Surcharges Would Raise Needed Revenue and Support Economic Recovery
by Alexandra Forter Sirota
- North Carolina’s temporary tax package, created in 2009, was more than just the 1-cent sales tax; it included high-income surcharges on the state’s wealthiest individuals and corporations. The package provided a critical short-term boost to state revenues in order to support investments in the state’s public structures.
- Although the tax package is set to expire on June 30, 2011, the deep cuts to public education and human services necessary to balance the budget without new revenue provide compelling reasons for continuing both parts of the temporary tax package.
- Maintaining the surcharge on the wealthiest households and corporations is particularly important to ensuring that all households and businesses equitably share the responsibility for closing the state revenue shortfall.
- Economists have found that addressing state budget shortfalls through increased revenue from wealthy households has less of an impact on economic growth than budget cuts alone or broad-based taxes. In addition, because of federal tax decisions, North Carolina’s wealthiest households.