In today’s commentary JLF’s John Hood writes about the accomplishments of the current legislature and the disconnect among conservatives and/or Republicans between perception and reality. For example, tax reform.
At one recent event, I explained the economic rationale for replacing the existing federal income tax code with a simpler, pro-growth Flat Tax of the kind that President Reagan and many of his economic advisors believed was the ultimate goal of tax reform. Afterwards, a local Republican activist came up, expressed him enthusiasm, and asked if I thought the North Carolina legislature would ever consider enacting such a tax plan.
Which is, of course, exactly what the legislature did in 2013 — a fact I had just finished explaining, obviously ineptly, to my audience. Starting in 2014, North Carolina will impose a single, flat-rate tax on a broader base of personal income. When fully implemented, tax reform will establish a flat rate of 5.75 percent, down from today’s income-tax rates of 6 percent, 7 percent, and 7.75 percent. The corporate income tax will also drop substantially. Before the tax reform, North Carolina imposed some of the highest marginal tax rates in the South. After tax reform, our marginal tax rates will be among the lowest.
If conservatives want more reforms like these, we must begin by making sure we know the facts. Then we must thank the conservative legislators who champion reform and make sure other people know that North Carolina is being put back on the right track.
