corporate income tax

The North Carolina General Assembly is still finalizing a two-year budget. Budget proposals from the House, Senate, and governor would have varying effects on North Carolina’s fiscal future. Spending restraint, tax cuts, and considerable savings would contribute to more opportunities and bigger paychecks for North Carolina families.

The House budget plan, per previous agreement, would spend about the same total amount as the Senate plan. Differences exist, however, primarily with a less aggressive tax cut plan and more aggressive pay raises to teachers and state employees. Similar to the Senate plan, the House proposal would set aside significant funds in the Savings Reserve and Capital Infrastructure funds.

Despite weak opposition to the Senate tax plan, tax cuts benefit more than just the one with the reduced legal tax liability. Low- and median-income households receive a much larger benefit from the Senate’s rate cuts.

Recent revenue reports project overcollections in the current fiscal year of $6 billion. This added windfall provides many options to budget writers. The Senate budget plan focuses on tax cuts and significant investments in pay-as-you-go infrastructure projects.

Today, John Locke Foundation President Donald Bryson responded to the announcement from North Carolina legislative leaders on an agreement for the state’s biennium budget total. John…

Eliminating the state corporate income tax would enable a more fair tax climate for businesses. Research shows that workers are most harmed by the corporate tax. Corporate tax elimination, combined with reducing or eliminating crony handouts, would strike a major blow against corruption.

The Senate tax plan would continue to build upon the past decade of successful tax reforms. Critics say corporate tax elimination only benefits “wealthy corporations.” Research shows, however, that workers are the biggest beneficiaries of corporate tax cuts.

North Carolina state government continued to have strong finances seven months after the economy first began to slow in March. Budget writers should nevertheless be cautious about adding spending commitments, however.

Just before Labor Day, Gov. Roy Cooper signed the final bill appropriating money from North Carolina’s $3.6 billion share of the Coronavirus Trust Fund. He was clearly under duress. A veto of the bill that passed with large bipartisan majorities would surely have been overridden.

Lacking any guidance from Congress on the Coronavirus Relief Fund question, budget decisions will continue to be made in a fog of uncertainty. It underscores the need for even more spending restraint than the General Assembly has demonstrated since 2011.