Yes, the purpose of taxation is to raise money to pay for government services, but we clearly disagree on progresivity. Taxation coercively denies everyone their right to the fruits of their labor. This is a right that is specifically recognized in the NC Constitution and that is endowed in each one of us equally by our Creator. Progressivity denies this equality of rights and assumes that the more income you have the fewer rights to that income you posses.
But even if progressivity is desired, it should be achieved with large zero rate brackets at the bottom, making the average rate progressive, rather than with increasing marginal rates. Progessive marginal rates make no sense from an economics perspective. They penalize and therefore discourage work effort, investment, and entrepreneurship and they punish economic success. This is no way to encourage economic growth.
You are right there is double taxation everywhere and the ?corporate income tax? makes sure that that double taxation is felt, not only by corporate shareholders but by workers and customers. It is difficult for me to see how a corporate tax on Wal-Mart that reduces the wages of its low skilled and low-income workers and raises prices to its mostly low income customers could be considered progressive. But the main point is still that none of the corporate tax is paid by the corporation, not because of loopholes or tax shelters, but because it can?t be, and it is misleading at best to talk about corporations paying their fair share.
Clearly, we can both point to studies ranking NC?s ?business climate? according to one set of criteria or another, but the fact is that North Carolina had unemployment rates well above the national average during the recent recession and has had a recovery that is lagging behind much of the rest of the nation. The most important way that state government affects the cost of business expansion and therefore job creation is through taxation. Therefore, taxation is the most important policy tool that the state has at its disposal for stimulating economic growth. There is probably no more agreed upon proposition in economics than the idea that the more you tax productive activities the less likely it is that those activities will be pursued. By reducing income tax rates across the board and by, for now, dramatically reducing the corporate rate, the state has the power to increase the rewards for investment and work effort thereby providing an incentive for economic growth and job creation. In addition, this reduction in the corporate tax would have the happy effect of reducing the hidden tax burden on workers and consumers.
