Alex Adrianson of the Heritage Foundation’s “Insider Online” recognizes that North Carolina still has room to improve its tax code, even after the substantial improvement tied to the 2013 tax reform plan.

The Tax Foundation also notes North Carolina’s achievement in making “the single largest rank jump in the history of the Index” by improving from “44th place last year to 16th place this year”:

The state improved its score in the corporate, individual, and sales tax components of the Index, and as the reform package continues to phase in, the state is projected to continue climbing the rankings.

North Carolina’s largest improvement was in the individual income tax component section, where legislation restructured the previously multi-bracketed system with a top rate of 7.75 percent to a single-bracket system with a rate of 5.8 percent and a generous standard deduction of $7,500. [“2015 State Tax Business Climate Index,” by Scott Drenkard and Joseph Henchman, Tax Foundation, October 2014]

But don’t rest on your laurels yet, North Carolina. There is more to do. As the John Locke Institute’s Roy Cordato points out, North Carolina still has a capital gains tax, which is essentially a second layer of tax on saving, investment, and entrepreneurship. The ideal reform would be for North Carolina to be more like Belgium, New Zealand, and Hong Kong and eliminate it all together. That would make North Carolina the only state that doesn’t have a capital gains tax.