By Cedric Johnson
Policy Analyst, Budget & Tax Center
- This tax plan, if implemented, will provide the wealthiest 20 percent of taxpayers a significant tax cut, which would be paid for by increasing taxes on 60 percent of the state’s taxpayers, primarily middle- and low-income taxpayers.
- The plan eliminates the personal income, corporate income and franchise taxes, which, combined, generate $12 billion in revenue for North Carolina schools, infrastructure and other public priorities. The revenue loss would be replaced via a higher sales tax that would cover more goods and services, a business license fee and a real estate transaction fee.
- North Carolina policymakers have embraced a tax plan that would provide a significant windfall to the wealthiest 20 percent of state taxpayers while requiring low- and middle-income households to pay more. A family earning $24,000 a year would see its taxes rise by $500, while one earning $1 million would get a $41,000 break.
- The plan is designed to raise no more revenue than the state does currently, meaning North Carolina would be unable to make adequate investments in education, transportation and other foundations of a strong economy.
- The underlying theory of this proposal, that income taxes are a barrier to economic growth, is wrong. Tax cuts have little-to-no bearing on economic performance, according to analyses of all 50 states and the historical record.