Tax cuts upon cuts
Published April 14, 2017
Editorial by Greensboro News-Record, April 11, 2017.
Republicans believe tax cuts produce prosperity, but can there be too much of a good thing? North Carolina may find out soon.
The state Senate approved what Republicans call a billion-dollar middle-class tax cut last week, continuing a years-long effort to whittle income taxes to historically low rates.
The fact that this round of cuts is billed as benefiting the middle class makes it stand out from previous tax changes that primarily helped the wealthy and corporations. But this one hardly excludes them. It slices the corporate income tax rate from 3 percent to 2.75 percent and reduces the personal income tax rate from nearly 5.5 percent to 5.35 percent. This will return the most money, again, to top earners, not to the middle class.
Still, the idea that everyone will share this time is appealing. But at what cost to state and local governments?
State tax policy doesn’t happen in a vacuum. President Donald Trump also promises large tax cuts, and he’s proposed massive reductions in federal spending that could force states to fill in the gaps. Cuts in federal grants for housing, education, health care, environmental enforcement, even disaster relief will place more burdens on state governments. If the state lacks the money, it will pass more costs to local governments.
There are already needs that North Carolina has neglected since the Great Recession. It is trying to catch up with teacher pay. It has a long waiting list of children eligible for preschool programs for whom there is no room. The legislature mandated smaller class sizes in elementary grades but provided none of the hundreds of millions of dollars it will cost to do that. It wants to hold down tuition at UNC campuses, which is a worthy ambition. So where does the money come from to operate world-class universities? Where is the money for transportation, for clean-water programs, for Medicaid, public safety, the courts?
Republicans say lower taxes spur business growth that generates more revenue. That formula hasn’t worked in states like Kansas, Mississippi and Alabama, but North Carolina Republicans say it has worked in our state. They have numbers to show it.
Let’s be cautious, though. North Carolina’s job creation since the end of the recession has been steady but not spectacular. Revenue growth has been healthy. It’s happened as part of a national recovery under a federal administration that kept revenue flowing to the states, not under one that promises to cut off the money. Furthermore, North Carolina’s recovery has been uneven. The job growth and tax revenue have been generated largely in the Triangle and in Mecklenburg County, where local governments tax themselves to provide enhanced services. Meanwhile, half of North Carolina’s counties are losing population and revenue-starved, little helped by the legislature’s tax-cutting priorities. Their plight stands to get worse.
State policy makers need to look at the whole picture and figure out how to achieve broader growth rather than plunging the whole state into a downturn. Let’s look before we cut.
April 14, 2017 at 9:48 am
Norm Kelly says:
So, when libs rule, they raise every tax & fee they can find, then create new ones. When they 'temporarily' raise the sales tax, everyone just KNOWS without doubt that it will temporary only temporarily, then it will be converted to permanent. How well does that work? Let me give you 1 prime example of how bad lib 'intelligence', economic knowledge, and schemes work. First, raise taxes. Second increase regulations. Third, offer 'incentives' to any company you LIKE and would like to see come to NC. Fourth force the local district to participate in the 'incentives' game. What's the net result? SOME few companies choose to do business in NC. The rest prefer to move to low-tax, low-regulation states. The majority of economic activity passes us by. And while the rest of us, individuals as well as businesses, feel the negative impact of increased taxes and increased regulations. Just so lib pols can play king with the economy and business. Both places they DON'T BELONG!
What's the other problem with lib schemes? Making outrageous, ridiculous, uninformed statements about who is most impacted by tax cuts. Or as libs put it, those who benefit from the government stealing less money. What's wrong with their statements, including the editorial this is in response to? Simple. Even an elementary student could figure this out, though it might have to be a 4th or 5th grader. Who pays the most taxes? The poor or the rich? Of course, it's the rich. Which libs know but hope you accept their level of stoooopidity instead of thinking for yourself. If the rich pay the most taxes, who will feel the impact of a tax cut most? Again, too logical for any lib pol to figure out.
Those with money are leaving high-tax states in droves. Witness California and New York. Then there's Illinois. Instead of trying to balance their budget by cutting spending, or cutting taxes to encourage economic activity, they doubled-down on their failed lib schemes - they increased taxes to outrageous levels. What was the (predictable) result? Rich people and businesses LEFT Illinois.
What's better for the entire state of NC, raise taxes and regulations -OR- reduce taxes and regulations? Which is better at spurring economic activity? The last time taxes were cut in NC, what happened to the income at the state level? Did state income go up or down? UP! But libs don't want you to believe FACTS cuz facts are the antithesis to libs. FACTS prove libs wrong every time. (look at hildaliar as a perfect example of truth/facts being the undoing. she was a liar, law-breaker, co-conspirator in illegal international activity. yet she continues to blame everything else as to why she lost the election. including the stoooopid statement that she lost because she claims to be female!)
Do businesses move to localities where they will be penalized or rewarded? Which works better for you: penalizing your behavior or rewarding your behavior? If you said 'penalizing', you are a lib and should probably take a job on the editorial board of your local news rag!
If you get ANY of your news or information from ANY editorial news rag, you are misinformed, misled, and accept fake news. Just like if you watch CNN or MSNBC. Start educating yourself and you will know without doubt that editorials such as the one I reply to is simply a lie, simply fake, simply meant to mislead you into thinking that YOU benefit when the state steals more money!
