Spotlight Report

More to do on tax reform: Changing how business expenses are deducted

posted on in Spending & Taxes
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North Carolina’s tax code penalizes savings and investment by double taxing their returns—
specifically interest, dividends, and capital gains. These biases can only be eliminated by removing savings and investment from the tax base, or by eliminating the returns to saving; for example abolishing the taxation of capital gains. The goal should be what economists call “tax neutrality,” which implies treating all business and consumption activities equally. Along with eliminating or reducing the state’s capital gains tax, restructuring the way business deductions are taken should also be a high priority.

Spotlight 473 More to do on tax reform: Changing how business expenses are deducted

In June 2019 Roy Cordato retired from his full time position as Senior Economist and Resident Scholar at the John Locke Foundation and currently holds the position of Senior Economist Emeritus at the Foundation. From January 2001 to March 2017,… ...

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We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

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