If you don’t believe the lowering of North Carolina’s corporate income tax rate has benefits for this state, Virginia Gov. Terry McAuliffe does. The Democrat and longtime Clinton ally says his own proposal to lower Virginia’s corporate rate is based on recent actions from his southern neighbor.
When it comes to corporate tax rates, Virginia Gov. Terry McAuliffe doesn’t look to Maryland or the District — he instead holds his state up to North Carolina.
McAullife told me his proposal to lower Virginia’s corporate tax rate in 2017 to 5.75 percent from 6 percent was a direct response to North Carolina’s effort to lower its corporate tax rate from 6.9 percent in 2013 to 6 percent in 2014 and then to 5 percent in 2015.
North Carolina is again lowering its corporate tax rate on Jan. 1, 2016, to 4 percent. McAuliffe said pushing Virginia’s tax rate below 6 percent is an important psychological move to attract business to the state.
“I do a lot of economic development projects and the first question I always get asked is ‘What’s your corporate tax rate?’” McAuliffe, a Democrat, said. “We don’t have to match them amount for amount because we have a lot of other assets, but I would make the point that we have to be in the game.”
As the John Locke Foundation’s Roy Cordato has explained, the best tax policy would involve elimination of the corporate income tax, which is “hidden, dishonest, and deceptive.”
