BUDGET: Combined Reporting: Making business taxes fairer
Among the most immediately effective changes legislators could make to North Carolina's revenue system, NC Budget & Tax Center Director Elaine Mejia writes, is mandatory combined reporting.
Current tax law in North Carolina allows multi-state parent corporations and their subsidiaries to file separate tax returns, which enables them to move profits out of the state and avoid paying for the services they use here. Combined reporting would do away with that.
"At a time when the state is strapped for cash and mom-and-pop businesses are struggling to stay open," writes Mejia, "it makes no sense for North Carolina to continue allowing large multi-state corporations to avoid paying their fair share of taxes."
Among the key points Mejia brings up in this week's NC Justice Center Legislative Bulletin, which is delivered to lawmakers:
- Multi-state corporations that do business in North Carolina can move profits to subsidiaries in other states to avoid paying corporate income taxes.
- Mandatory combined reporting nullifies these tax-avoidance strategies, raising additional revenue for the state and leveling the playing field for small North Carolina businesses.
- North Carolina is vulnerable to costly tax litigation because it currently requires combined reporting for only selected corporations, and the amount of potential liability grows each year North Carolina fails to enact mandatory combined reporting for all corporations.
This past weekend, State Sen. Vernon Malone died. Rob Schofield of NC Policy Watch devotes his Weekly Briefing to recounting Sen. Malone's accomplishments.
On issues that mattered, Schofield writes, "Malone was a staunch integrationist - a tough man who had known the evils of the nation's shameful, segregated past very personally and who had worked at the epicenter of the battle between those who resisted change (or sought to reverse it) and those who envisioned a truly integrated society. That epicenter, of course, was the battle over our public schools."
Citing News & Observer accounts, Schofield concludes, "Vernon Malone was one of the key players in helping to drag North Carolina's capital county out of its narrow-minded, backward-looking past into its modern incarnation as a bastion of comparative progress and prosperity. It was and is quite an accomplishment."
PAID SICK DAYS: Paid Sick Days campaign comes to Wilmington, Asheville this week
The NC Paid Sick Days Coalition is hosting two events this week in Wilmington and Asheville to promote the campaign for healthy families and healthy workplaces.
Tonight, Tuesday, April 21, the statewide series of town hall meetings comes to Wilmington. Advocates working on the campaign will join with community members to raise awareness and share stories about how paid sick days improve life for North Carolina’s working families.
The Wilmington meeting will take place Tuesday, April 21, 2009, 6 p.m.-7:30 p.m. at the at International Longshoremen’s Association (ILA) Hall in Wilmington. Local sponsors for the event are the Southeastern Alliance for Community Change and the NC Justice Center.
On Thursday, advocates travel to Asheville. The Asheville meeting will take place Tuesday, April 23, 2009, from 6 p.m.-7:30 p.m. at the Pamela Mills Turner Conference Room in the United Way Building, 50 S. French Broad Avenue in Asheville. Local sponsors for the event include Children First/Communities in School of Buncombe County, Just Economics, WNC Central Labor Council, and Legal Aid of North Carolina Clients Council along with the NC Justice Center.
More than 30 groups -- including health care organizations, women’s groups, and advocates for children, families, and older Americans – have signed on to the NC Paid Sick Days coalition.
The NC Paid Sick Days Coalition’s immediate aim is passage of the Healthy Families and Healthy Workplaces Act, HB 177/SB 534. Now introduced in both the North Carolina House and Senate, the bills have garnered dozens of co-sponsors, with 27 on the House bill and 14 on the Senate version.
JOBS: New numbers show North Carolina's labor market continuing to unravel
North Carolina employers shed 41,300 payroll positions in March, according to data released April 17 by the Employment Security Commission. This makes March the second-worst month for job losses since the start of the recession.
"The March payroll numbers are abysmal," said John Quinterno, research associate at the NC Budget & Tax Center. "With the exception of the government, every major industry group slashed payrolls. Only three states lost more jobs than did North Carolina in March, and none lost more in percentage terms."
Private-sector employers eliminated 41,500 positions in March. Net losses occurred in every industry with the greatest numerical declines occurring in professional and business services (-10,100), followed by manufacturing (-9,200, predominately in durable goods manufacturing) and construction (-8,500). Relative to payroll sizes, construction employment fell the most, down 4.1 percent. These private-sector losses were offset slightly by an increase in government -- primarily federal government -- employment.
"Job losses accelerated in March," added Quinterno."Since the start of the recession, North Carolina has recorded a net loss of 214,000 jobs. Some 43 percent of the jobs losses have occurred since January, and 81 percent have occurred since last September."
Despite the sizable job losses, the March unemployment rate ticked up only slightly, rising to 10.8 percent from 10.7 percent in February. Last month, an additional 2,417 individuals joined the ranks of the unemployed, bringing the statewide total to 492,512.
"The monthly change in the unemployment rate was the smallest one recorded since the start of the recession, but it in no way means that the labor market is improving," explained Quinterno. "The state unemployment rate has risen for 15 months and has reached the highest level on modern record."
The minimal change in the unemployment rate likely is tied to the contraction of the state's labor force. In March, 31,000 individuals left the labor force, many probably due to their difficulty in finding work. While many such individuals are effectively jobless, they are excluded from the monthly tally. If even half of those individuals were both jobless and included in the survey, the state unemployment rate would have equaled 11.1 percent.
"There are no green shoots of hope in today's state employment report," says Quinterno. "North Carolina's labor market is simply unraveling."