Simple tax law change could address inequality and bring in millions
Published May 12, 2016
Editorial by NC Policy Watch, May 11, 2016.
With North Carolina lawmakers currently struggling mightily to find the revenue necessary to provide public school teachers and state employees with meaningful raises and repair neglected and crumbling infrastructure, a new report from national fiscal policy experts has identified an obvious revenue source that would, if tapped, produce positive ripple effects throughout the state economy.
According to “State Estate Taxes: A Key Tool for Broad Prosperity,” a new report by the Center on Budget and Policy Priorities, North Carolina needs to take a more sensible approach to revenue by reinstating an estate tax so the state can afford to invest in its schools, transportation, health care, and communities for everyone.
If all states without an estate tax reinstated this tax, the report finds, they could raise an additional $3 billion to $6 billion a year, says For North Carolina, reinstating an estate tax would generate $100 million to $170 million a year — funds that can boost public investments to promote broadly shared economic prosperity across the state.
The estate tax only affects inheritances of more than $5.25 million, so most North Carolinians would owe nothing. The year before North Carolina eliminated the estate tax, only 23 of the wealthiest people had to pay. With an estate tax, North Carolina would have more resources to invest in broad prosperity – and that pays off for everyone in our state.
Proponents’ claims that this tax break for the wealthiest would boost economic growth and investment in the state have not held up, the report shows. States that have reduced or eliminated their estate taxes are actually seeing higher tuition at public colleges; cutbacks in teachers and resources at K-12 schools; and deteriorating roads, bridges, water treatment facilities, and other public infrastructure.
The claim that estate taxes drive people from state is also vastly overblown, according to the report.
“There is no consistent effect of state tax policies on elderly migration across state lines, and any revenue that might be lost by a small number of people moving would be more than made up by the gains for those who stay,” says Cedric Johnson, Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center. “Is it worth giving up a significant portion of the revenue we need to help our communities thrive just because it might keep a few wealthy people in the state?”
Today in North Carolina, the more money you make, the smaller the share of your income you pay in state and local taxes, a result of policy decisions made by state lawmakers. Changing the tax code to give big breaks to the people at the top while reducing investment that helps communities thrive prevents our state from moving forward. Reinstating an estate tax is a step lawmakers should take to help ensure that our state’s tax system works for everyone.
http://www.ncpolicywatch.com/2016/05/11/why-is-nc-letting-a-handful-of-multimillionaires-get-away-this/
May 12, 2016 at 10:13 am
Jennifer Stamper says:
Call it whatever you want but an estate tax is double taxation and charging it to just the wealthy doesn't change that fact. All of the money in an Estate has already been taxed and therefore this is double taxation and should be illegal in the United States. As I recall double taxation was one of the reasons for the American Revolution. Can you learn nothing from history?
May 12, 2016 at 10:36 am
Richard L Bunce says:
Really? What nonsense. A taxable event on death is nonsense. First they say it just effects a very small number of people (nearly a targeting of individuals which is a violation of the US Constitution) but then even if a few move away the rest will more than make up for it? Voting with their feet and/or estate planning result in the government expense to collect it will eat up most of the revenue. Revenue that will just be wasted by other government bureaucrats. How many family businesses will be destroyed? How many jobs lost? It is not an inheritance tax, it is a death tax. The deal is that The decedents Will could State to liquidate all the estates assets, pile up all the money in the Town square, and burn it... the Estate tax would still be owed.
May 12, 2016 at 2:58 pm
Norm Kelly says:
Let me guess: NC Policy Watch is a far-left wing radical tax & spend organization? Just what we need, an organization that supports the idea of pitting groups of citizens against each other. Another 'tax the rich' scheme from the left! Do they have ANY other ideas? I mean real ideas. Not just the same old tired worn out overused schemes. But an IDEA? Something that could work for ALL NC Citizens? You know, something like making it illegal and punishable to protect, harbor, hire, rent to, or otherwise support illegal aliens, kinda like Chapel Hill does. Until Chapel Hill stops harboring and supporting and defending illegal aliens, what they call a 'sanctuary city, our state should STOP providing state benefits to Chapel Hill.
Any IDEAS from the left? Haven't heard any yet! Schemes. Yes. Used, tired, useless garbage. Plenty. Real thought? Doesn't seem the left has this capability any more!
At some point more citizens need to start holding left-wing radicals, organizations writers and pols, responsible for their irresponsible and harmful schemes. More citizens need to start holding libs responsible for their schemes that claim some group of people are incapable of taking care of themselves or are somehow inferior to other citizens. Kinda like the buffet slayer does when he claims blacks can't prove who they are to get a (free!) state-issued picture ID or can't get to a voting booth within the allotted time-frame. Some of us actually believe that blacks are as smart and capable as whites. When will more blacks, and their supposed crook leaders, start also believing in themselves?
Lefties appear to believe that 'the rich' somehow OWE it to 'the poor' (or those chosen by the left) to GIVE them everything they want in life. Lefties somehow believe that 'the poor' can't do it on their own so it must be given to them. Perhaps it's just me misreading the schemes of the left. Is there a difference between buying votes and supporting those who are incapable of supporting themselves?
