by Locker Room contributor
Our Carolina Journal coverage of Gov. Mike Easley?s budget release yesterday, and fiscal analyst Joe Coletti?s comments in a press release, were the only source in North Carolina for the truth about what the governor?s budget does to the personal income tax.
Everybody else ? newspapers, radio, TV ? bought the idea that Easley wants to ?cut taxes? on upper-income North Carolinians by phasing out the 8.25 percent income-tax rate over the next two years. But since that 8.25 percent rate is currently scheduled to disappear on Jan. 1, 2006, the Easley plan is actually to hike income taxes by imposing an 8 percent rate in 2006, then finally phasing out the top rate in 2007.
Here?s a hint for those still not sure what this means: in the governor?s budget, his proposed income-tax change increases state revenue by about $20 million in FY 2005-06 and $24 million in FY 2006-07. How can a tax cut raise tax revenues?
No, don?t be clever. I already asked one of Easley?s advisors, Dan Gerlach, whether the administration has embraced supply-side economics. ?We have not suddenly been converted to dynamic scoring,? he responded wryly.