by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As promised when the N.C. General Assembly approved its sweeping tax reform package in 2013, the positive changes have helped North Carolina leap up the list in the Tax Foundation’s State Business Tax Climate Index.
From the Tax Foundation’s press release:
The Tar Heel State’s rank rose 28 places from its 44th place ranking last October, the largest improvement in a single year in the history of the report.
In mid-2013, North Carolina passed a comprehensive tax reform bill that transformed one of the worst tax codes in the country into one of the best. The reform package includes a provision that will reduce the individual income tax from a top rate of 7.75 percent to a flat rate of 5.75 percent by 2015, a more generous standard deduction for all taxpayers, a reduction in the corporate tax rate from 6.9 percent to 5 percent by 2015, and an immediate repeal of the estate tax.
“This is one of the most impressive state tax reform effort we’ve seen in the last 10 years,” said Tax Foundation Economist and Manager of State Projects Scott Drenkard. “While other states might reform one or two elements of their tax code, North Carolina leapt over 28 states by passing reforms on corporate, individual, and sales taxes. This level of reform—both in scope and craftsmanship—is rare.”