Economic Insecurity? N&O Distorts Truth About NC’s Economy

This week the Raleigh News & Observer published an op-ed by the Executive Director of the far-left NC Budget & Tax Center.

The piece was light on facts and heavy on empty assertions about how North Carolina’s decade of tax cuts “hasn’t delivered greater economic security for most of us,” and that wage growth and job creation have been sluggish.

According to the author, a thriving economy is possible only through “smarter, better government,” by which she means bigger government.

So, what does the data say about our state’s economy in light of the last ten years of tax reforms that improved our business tax ranking from a lowly 44^th to an impressive 9^th?

• Rapid poverty reduction: At the time of the historic tax reforms of 2013, North Carolina was struggling with a poverty rate of 17.9%. By 2022, that rate had fallen dramatically to 12.8%.
• Robust job growth: From 2013 to 2022, North Carolina’s job growth rate was 11^th highest nationally at 21.4%, notably higher than the national average of 16.5%. Interestingly, four of the ten states ahead of North Carolina in job growth have no state income tax, along with low-tax Utah.
• Strong income growth: Similarly, during those same years North Carolina was tied for 10^th in personal income growth at 36.8%, well ahead of the national average of 28.1%. Also similarly, three of the nine ahead of North Carolina have no state income tax, along with Utah.

In addition to misleading about North Carolina’s economic performance, the article advances the false notion that tax cuts have only been directed at the state’s richest – demonstrably not true because rates have been lowered for all income groups, and aggressive increases in the standard deduction has exempted a growing number of low-income households from any tax burden at all. Indeed, the data shows that “the rich” are paying a higher share of the state’s income tax burden years after the tax reforms began.

 Moreover, the article’s assertion that corporate tax cuts only benefit wealthy out-of-state shareholders is a very short-sighted claim disproven by research that shows corporate tax cut benefits mostly accrue to workers.

Further, let’s compare North Carolina’s performance for a ten-year period prior to the tax cuts with the results in the decade after the tax cuts listed above.

• Poverty rate among highest in nation: In 2010, North Carolina’s poverty rate of 17.4% was 9^th highest in the nation. As noted above, it continued to drift even higher to 17.9% by 2013.
• Job losses: In the decade from 2000 to 2010, North Carolina lost 1.25% of its jobs.
• Income lagged behind: From 2000 to 2010, North Carolina’s median income grew at a rate of 14.4%, below the national average of 17.4%.

Don’t be fooled by the leftists at the Budget & Tax Center. They want to convince you that North Carolina’s strong economic growth of the past decade – which far outpaced the national average – somehow is creating “economic uncertainty.” Meanwhile, they’ll advocate for the destructive tax and spend policies of the first decade of the 2000s, resulting in North Carolinians falling economically behind.