REVENUE MODERNIZATION IN 2013: A Guide to Assessing Proposals
North Carolina policymakers have pledged to make revenue modernization a priority in 2013. The decisions they make – and the principles that guide them – will be the foundation for how we as a state pool our resources to educate our children, protect our communities, and support economic growth and prosperity for generations to come.
The Budget & Tax Center strongly supports modernizing North Carolina’s tax system. It’s the key for making sure that community needs across the state are consistently met -- in good times and bad. BTC has conducted research and analysis over the years that shows why updating our tax system – truly reforming it to reflect today’s economy and the challenges North Carolina faces – is the only way to both put the state’s finances in order and put us back on a path to widely shared prosperity.
To be sure, the Great Recession and the policy choices made in response to a record-breaking decline in revenue have made all too clear the problems with North Carolina’s tax system. Tax collections as a percentage of personal income are near a 40-year low for North Carolina. That might sound good at first but really it threatens the state’s ability to adequately invest in important what it takes to create jobs and build a strong economy. But beyond its inability to meet current and future needs, our tax system also is out-of-date, upside-down, and unaccountable.
These problems need to be addressed as part of real, comprehensive reform.