North Carolina became a great state by investing in public education for all children, supporting job training for workers and connecting research and innovation from public universities to private farms, factories and businesses. State lawmakers turned their backs on this history when they approved the final tax plan.
By cutting taxes for the wealthiest taxpayers and reducing resources to support public investments, the tax deal reached by our legislative leaders and governor charts a new and risky course for our state. It is a course that promises to bring greater fiscal challenges and economic hardship.
Proponents have falsely claimed that it will usher in a new period of economic growth for our state and solve a host of serious and persistent challenges, such as poverty and unemployment. Instead, the changes to our tax code will undo the progress we have made in these areas. It is, after all, not our tax rates that have pushed jobs offshore or driven North Carolinians out of rural communities to urban centers or limited employment opportunities for our workforce to low-wage jobs.
North Carolina needs a common-sense and evidence-based policy agenda that addresses our persistent economic challenges. We need to rebuild our investments in job training for high-tech fields, support infrastructure development that connects our businesses to more markets and our workers to better jobs, and encourage entrepreneurs creating start-ups and connecting to growing industries.
Instead our policymakers are relying on policies that have failed in other states. States that have low income taxes haven’t seen faster job creation and have had to increase other taxes paid by middle- and fixed-income taxpayers. In North Carolina’s tax plan, nearly two-thirds of the benefit goes to taxpayers with average incomes of $940,000. Meanwhile, middle class people earning less than $84,000 a year will see their taxes increase on average.
Some people might get a tax break, but in the end, everyone will lose under this tax plan. The cuts to revenue will hinder our leaders’ ability to invest in the next big economic opportunity for our state because there simply won’t be enough money. Where we once led the fight against poverty, where we once led on expanding traditional manufacturing, where we once led on merging research and development with private sector expansion, we will now only lead in the race to shrink government investments in things people rely on.
Such an approach is shortsighted. North Carolina established its tax system early in the 20th century, transforming the state from a poor, agrarian state into a place that is known globally as a great area to live and do business. Taxes made statewide public education possible and enabled North Carolina to expand access to all children regardless of their race or ethnicity in the post-Civil Rights era. Taxes built the transportation infrastructure that established North Carolina’s early reputation as the “good roads state”, and taxes encouraged the development of research and development centers clustered around public universities across the state.
In future legislative sessions, we hope our policymakers take a closer look at our history and rethink their approach.
When a state has the funds to make proven investments in education, job training, and safe communities, the returns are great. Investments made with tax revenues contribute to greater economic opportunity, and they support the expansion and attraction of businesses. The mortar in the foundation of economic opportunity is our collective investment in our communities through taxes. Shifting the tax load to middle- and fixed income taxpayers and reducing overall tax collections significantly is a crack in that foundation.