Benefits of NC tax cut remain mixed

How well has the GOP-led North Carolina tax cuts of 2013 helped its corporations and individuals?

Tax cuts begun in 2013 in North Carolina have not been a train wreck, as they have been in Kansas, but neither have they lived up to GOP promises that NC's economy, job growth and wage increases would be flying high by now. They're not. The flight remains a bumpy ride. Still, GOP tax-cut supporters are happy that at least the economy and job market have avoided being a Kansas accident scene.

The North Carolina tax-cut experiment started in 2013 by its GOP-dominated state legislature, and what it may portend for the country as a whole with the proposed GOP federal tax plan, is a mixed bag at best. That's the overall conclusion by the Washingtonpost.com on Dec.3, 2017, in Todd C. Frankel's feature article entitled, "What happened when North Carolina cut taxes like the GOP plans to for the country."

On the positive side, Frankel writes that the overall results in North Carolina of its 2013 initiated tax plan has not been the disaster that occurred in the Kansas tax-cut experiment. There, the GOP-led Kansas Legislature slashed taxes with the promise that business and new job creation would skyrocket as a result. The exact opposite occurred; Kansas state revenues plummeted.

As a consequence in the face of hundreds of millions of dollars of red ink created by the GOP's flawed tax scheme, the Republican-dominated Kansas legislature was forced to increase taxes. So reported The Wichita Eagle at Kansas.com on June 12, 2015: "Kansas will avoid massive budget cuts after a plan to increase taxes crawled to passage in the Legislature." | More>

But the financial chaos in Kansas remains in turmoil. For example, Republican Gov. Sam Brownback of Kansas vetoed the legislature's tax increase solution as on the right road to state fiscal responsibility. Instead, Brownback vetoed the bill that would have increased taxes, and enough Kansas lawmakers fell in line behind Brownback to support his veto, as reported by NYTimes.com on Feb. 22, 2017. And the fight continues. | More>

Yet, in North Carolina, which pushed ahead with a similar tax cut agenda as the Kansas model, the news of its current results has had a lower press profile.

The Republican-dominated North Carolina tax cut bill has had about four years to test reality against theory for the tax cuts handed out to businesses. So far, the benefits of the North Carolina tax cuts for corporations and businesses remain uncertain.

Reports the Washingtonpost.com: "The corporate rate dropped in steps from 6.9 percent to just 3 percent
this year, the lowest in the nation among states that have such a tax. The rate is set to fall to 2.5 percent in two years." That rate is the lowest in the nation now among states that have a corporate tax. For its achievement, Forbes magazine selected the state as the number one business-friendly state in the union.

Supporters of the corporate tax bill say North Carolina's slightly higher number of jobs and its overall uptick in the growth of the state economy can be attributed primarily to the tax cuts. Others disagree. They believe the reason North Carolina's economy remains relatively healthy is murky, and give little credence to the GOP's  battered theory of trickle-down economics as viable for continued growth. 

There are two sides to every coin, and what is certain if facts and promises still matter, is that NC's overall economy remains less robust than what had been promised prior to implementation of the tax cuts.

Reports the Washingtonpost.com: "The tax changes in North Carolina haven’t produced the fiscal calamity that led Republican legislators in Kansas this year to reverse dramatic cuts they passed a few years earlier, but nor have they produced the kind of win-for-all economic prosperity national Republicans say their effort will spur."

The least shiny star in the crown of the GOP-led North Carolina tax cut frenzy has to do with workers and citizens losing their previously progressive tax schedule and had it replaced with a repressive, flat tax of 5.75 percent by the NC Repubicans.

Once again corporations get the metaphorical best cut of beef from Republican politicians in North Carolina while its citizenry and workers get the baloney. 

 


 

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