Irony, hypocrisy and flawed methodology on Tax Day
Published April 18, 2014
by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, April 16, 2014.
The irony seemed to completely escape Governor Pat McCrory Wednesday as he took the podium at a Tax Day event to heap praise on last year’s tax package that gave huge breaks to millionaires and large corporations while asking many small businesses and most North Carolina families to pay more.
McCrory hailed the tax changes as a boon to the state’s future just two days after a legislative committee charged with coming up with a way to increase teacher pay acknowledged there wasn’t enough money to fund raises for all teachers next year.
North Carolina currently ranks 46th in the country in teacher pay and it takes 14 years for a teacher to earn a $40,000 salary.
McCrory has proposed raising salaries for new teachers next year but leaving any increases for veteran teachers dependent on the state revenue picture—which thanks to the regressive tax cuts means it’s highly likely they won’t be getting one.
The Fiscal Research Division of the General Assembly recently reported that personal income tax collections are more than $200 million below projected levels because of the tax changes. And that does not include the $438 million loss in revenue already built into the budget because of the tax cuts.
It wasn’t supposed to be this way. Just over a year ago, McCrory told state lawmakers in his State of the State address that any tax reform must be “revenue neutral.”
If McCrory had simply lived up to that commitment there would be enough revenue to give all teachers and state employees a raise next year.
McCrory made his remarks on Tax Day at a media event held by a right-wing think tank heavily funded by McCrory’s own state budget director, Art Pope. Pope himself weighed in with lavish praise for the regressive tax shift in a misleading and hypocritical column in the News & Observer.
Pope dismissed criticism of the decision by legislative leaders to allow the state Earned Income Tax Credit to expire and in effect raise taxes on more than 900,000 low wage workers by bizarrely blaming the Democrats who created the state EITC for its expiration—as if the Republicans in control of the General Assembly last session were powerless to renew it.
Then Pope made the hypocritical leap to also claim that it is Republican legislative leaders who deserve credit for helping the poor since they decided not to renew a temporary sales tax increase that expired in 2011.
Apparently Republican legislators in control of the General Assembly should be celebrated for not renewing a sales tax increase but excused for not renewing the state Earned Income Tax Credit. That somehow is the Democrats fault. Pope also neglected to mention that lawmakers also allowed a temporary tax surcharge on the wealthy to expire in 2011 too, further adding to regressive nature of the combined tax changes in the last few years.
But maybe the most disturbing part of the Tax Day propaganda blitz from Right Wing Avenue was the assertion that most people in North Carolina will pay less in taxes thanks to the changes passed in 2013.
It is simply not true.
The N.C. Budget & Tax Center finds that most middle class and low-income families will pay more on average under the tax plan, but it’s easy to see why the folks on the Right feel obligated to distort the facts to say otherwise.
There’s no dispute that a millionaire will pay nearly $12,000 less under the tax change. That’s a hard sell, especially when families are losing their college savings plans, losing their EITC, paying more to see a movie, etc.
The claim that most taxpayers are paying less is based on a study plagued by flawed methodology. It’s not even clear if the study considers the elimination of the state EITC at all and it uses arbitrary income groups that do not fit North Carolina.
The study uses an income level of up to $100,000 to determine the effect of tax changes on low and middle income families. But $100,000 is hardly middle income in North Carolina. Only the top 11 percent of taxpayers make that much. More than two-thirds of taxpayers earn less than $50,000.
The bottom line is that most families will pay higher taxes on average because of the changes made by the 2013 General Assembly and Governor McCrory. Some corporations and most wealthy individuals will pay much less.
And it is not just the N.C. Budget & Tax Center that thinks so.
The staff of the Republican General Assembly does too, as an Associated Press story pointed out in December. A married couple with two children earning $20,000 a year will pay $262 more under the new tax plan while a married couple with two children that earns $250,000 will get a tax cut of $2,318.
No wonder the Right is playing games with the numbers. The reality isn’t sitting very well with families struggling to make ends meet and watching millionaires get a tax break that is not much less than a minimum wage worker earns in a year.
You have to give the folks on the right credit for one thing. It’s not easily to pack irony, hypocrisy and flawed methodology into a single day, but McCrory, Pope, et al managed to do it on Tax Day 2014.
April 18, 2014 at 12:06 pm
Norm Kellly says:
When taxes are cut FOR EVERYONE, libs refer to it as 'regressive tax cuts'. When libs raise taxes ON THE WEALTHY, libs refer to it as progressive. What's the difference? It good to raise taxes on success, it's bad to LEVEL THE TAX CODE. Penalizing success is seen as a 'progressive' idea, so it's proper. Providing a level tax system so everyone pays, some pay more still, but everyone has a dog in the fight is bad, from a lib perspective.
Chris refers to the fact-laced editorial by Art Pope as misleading and hypocritical. Figures. Told you in other posts that libs are genetically prevented from seeing and understanding facts. The only thing libs understand when it comes to taxes and spending is that more taxes (on the wealthy!) results in more money for them to spend. But libs also fail to understand that sales taxes negatively affect 'the poor' more than it does 'the wealthy'. So why do libs complain about the sales tax being lowered at the same time they complain about leveling the income tax? Libs also fail to recognize that locations that penalize wealth & success are failing. They are raising less taxes with the higher rates, not more taxes. The lib tax policies are driving 'the wealthy' out of their districts, into districts that are more friendly to success & wealth. Lib policies have their own demise built in. Yet, since this is a fact, libs fail to see it. Even the White House occupier said that raising some investment tax wouldn't raise more revenue for the central planners, but it was the right thing to do to penalize 'the wealthy'.
Somehow, libs are allowed to claim that a reduction in the sales tax WILL NOT impact 'the poor', average people. How is this possible? I know it's only 1 aspect of the tax changes, but it is still a positive impact for EVERY CITIZEN of the state. Is it that libs dislike that 'the wealthy' are also allowed to participate in the lower sales tax rate that has them spewing so much hatred about ALL tax changes? If the libs implemented a temporary sales tax increase that was actually allowed to remain temporary and sunset when it was supposed to, why does this anger libs and Chris so much? Did I miss it when libs complained that the Demons in Raleigh implemented a sales tax increase but that it was only temporary? Of course, I do expect libs to complain when ANY tax is reduced, actually cut not the way demons typically describe a cut that is actually an increase just smaller than they wanted to increase. This time, it was an actual cut. Is this was irritates libs so much?
'Some corporations and most wealthy individuals will pay much less.' So this fact is admitted to by libs? Interesting. Does it hurt? Back to the point of encouraging people & businesses with money to move HERE from the lib-controlled locations that are raising taxes & fees. Especially on 'the wealthy'. Didn't Margaret Thathcer, that other despised conservative of the libs, once make a statement similar to 'the problem with socialism is that eventually you run out of other people's money'? Even if it wasn't her, the sentiment is real. The economic impact of businesses moving here to avoid the high/punitive tax rates in liberal mecca's could more than offset the reduced rates. Same is true for 'the wealthy'. But libs prefer to play 'chooser of winners and losers'. One of their favorite games; right up there with penalizing success and pitting 'the poor' against 'the wealthy'. (doesn't that some old song get tiring at some point!?!?) In the lib mind, it makes sense to raise taxes and fees on businesses and 'the wealthy', then pick and choose the company that gets rewarded by the state for moving here or expanding here by using tax payer dollars. Which is actually better for the majority, and more fair, rewarding 'the chosen ones' or allowing everyone/every business to get the same reduced treatment? Perhaps more businesses and more wealthy will call NC home if we treat them like they are worthy of being here rather than treating them like a pariah. We've tried it the lib was of penalizing. Shouldn't we give not penalizing a chance? Perhaps what has happened around the country could happen here. History is, after all, on our side. Those areas where libs reign and allowed to implement their ideas are failing. Those areas where libs are reduced to a minority, where conservative ideas and a level playing field are allowed to thrive, are doing demonstrably better from an economic standpoint. Tax revenues are higher in conservative jurisdictions. More wealthy are moving to conservative controlled jurisdictions. Taxes for even 'the poor' are lower because of conservative ideas.
Why do libs dislike this? Because it also removes control, power, authority from the libs while giving freedom and MONEY to the masses. Which is more important to libs: success or power? The obvious answer, based on what libs do & plans they implement, that power and control are the MOST important things to libs. That's the only explanation for implementing socialized medicine. Does socialized medicine work? No. So why else would libs force it on us if not for expanded power and control? Does raising taxes on businesses and 'the wealthy' improve an economy? No. Then what other reason can be gleaned from libs as to why they prefer penalizing rather than rewarding? If their plans fail to improve economy, family, healthcare/insurance, income levels, etc. etc. etc., then why do they continue to force their plans on us? Power. Control. Self-preservation. Self-aggrandizement. Is Harry Reid interested in the land in Nevada, stealing it from the locals including a rancher, because 'it belongs to the people' or is he interested for his own/his families self-interest? Does Harry do ANYTHING without it being for his own self-interest? That question can be asked about virtually EVERY lib out there.
Enough reading of a useless, time-wasting editorial by another lib who can't see beyond his liberalism.
