JUST RELEASED: The Final Tax Plan
The tax plan recently signed into law by Governor Pat McCrory fails to make the fundamental changes North Carolina needs to create a modern, adequate and fair revenue system that can boost the state’s economy and strengthen schools, health care and other services families need to prosper and the economy needs to grow. The plan consists largely of cutting tax rates for personal and corporate income, in a way that will overwhelmingly benefit the wealthy, and does little to rid the tax code of costly tax loopholes (see details of the plan below). The result will be a significant loss of revenue and a greater reliance on the sales tax, which hits middle-class and low-income taxpayers the hardest. Further cuts to public education, health care and public safety are sure to follow, which will come on top of years of cuts to these vital services during and after the Great Recession.
Click here to read the complete BTC Report.
IN FOCUS: Taxes & the Economy - New Research from EPI
The best way for North Carolina to grow its economy is by investing in a well-educated workforce, according to a new paper from EARN—the Economic Analysis and Research Network, a project of the Economic Policy Institute, which includes the North Carolina Justice Center.
In "Education Investment is Key to State Prosperity", Noah Berger, president of the Massachusetts Budget and Policy Center, and Peter Fisher, research director at the Iowa Policy Project, find a strong link between the educational attainment of state workforces and both productivity and median wages. Expanding access to high quality education will create more economic opportunity for North Carolina and do more to strengthen North Carolina’s overall economy than anything else.
Read more here.
NEW RESOURCE: 2013 Tax Plans
The tax cuts for big, profitable corporations and the wealthy is the wrong choice for North Carolina. These irresponsible tax changes will not boost our economy or create more jobs, but they will result in middle- and low-income families paying more taxes and damaging cuts to important public services that both businesses and average North Carolinians rely on, including our public schools and universities which build a skilled workforce and encourage innovation. This page brings together our research on the tax proposals that lawmakers are debating.
ABOUT OUR STATE REVENUE WORK
North Carolina’s revenue system funds investments in the public structures—schools, courts, hospitals, colleges, universities, and infrastructure—that are critical to building and preserving a strong middle class and a 21st century economy. It is not just important that North Carolina have adequate resources to make these investments but how that revenue is raised is important too. The Budget and Tax Center produces research on state and federal tax policies with a focus on how they support economic opportunity and shared prosperity in North Carolina’s communities.
As revenue modernization once again becomes a major topic of debate in North Carolina, it is critical that proposals and ideas are measured against the following principles:
- Equity – How much a family or business contributes in taxes should be based on its ability to pay. The wealthiest should contribute a greater share of their incomes in taxes than those who are low- or middle-income.
- Adequacy – The revenue system should be able to keep up with the needs of the state. Population growth and changes in demographics often cause increased economic activity and greater demand for public services and better infrastructure. The revenue system should grow with the economy so state government can meet those needs.
- Stability – The revenue system should not overreact to changes in the economy and policies, like strong Rainy Day Funds, should be in place to smooth the availability of revenue in difficult times.