2013 Report on Project Work - Budget & Tax Center

The Justice Center’s Budget & Tax Center (BTC) seeks to inform and influence the public debate on budget, tax and economic issues through credible analysis; effective, strategic messages; and promoting broader participation by North Carolinians, particularly those impacted by the policies being enacted.

Changes to the state’s tax code will shape North Carolina’s economic and social landscape for years to come. In 2013, in the midst of the most prominent tax fight in the country, BTC played a critical role in the public debate about changes to the tax code by serving as the principal source of independent, reliable analysis on state fiscal policies and proposals for the public, policymakers and the media.

Through research, strategic communications and public education, the Justice Center demonstrated the harm to public investments—schools, health care and courts—and to the economy that proposed tax changes would have. The ultimate outcome is a tax plan that reduces available revenues by at least $650 million each year once fully implemented and shifts the tax load onto low- and middle-income taxpayers while wealthy taxpayers and profitable corporations get a tax cut.

Experts from the Budget & Tax Center produced the only independent analysis of who would pay under the tax plan, effectively demonstrating that the bottom 80 percent of taxpayers, those with incomes below $84,000, would generally see their taxes go up under the plan.

BTC dubbed this phenomenon “The Great Tax Shift,” where the richest receive the greatest benefit and the tax load is shifted on to those less able to pay. The term—and concern over the impacts on North Carolina taxpayers—came to frame the debate in coverage by the media as well as editorials in all major metro areas. Our engagement of community partners and faith leaders was essential to complement our analysis with stories of the real human impact of the tax changes in communities.

In combination with work to document that fewer dollars would be available to invest in educating our children, building our infrastructure and supporting the health and safety of our communities, BTC was able to demonstrate the harm to the broader economy as well. With help from BTC, economists and business leaders as well as leaders in other states spoke out making clear tax cuts would not deliver on job creation promises or usher in a period of growth. Tax cuts, as these leaders and the Justice Center argued, were not needed to grow the economy. In fact, BTC’s analysis demonstrated that this kind of approach to economic growth has failed in states that have tried it.

BTC efforts to provide rigorous and evidence-based analysis that tells the story of the role of taxes in supporting a stronger North Carolina will continue and gain importance as the impacts of the tax plan and subsequent budget decisions take effect.

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