Thursday, June 11, 2015

Kansas Tornado, Meet North Carolina

Tax cuts for coporations and for the rich can never fail to magically create new revenue, they can only be failed by not cutting taxes enough.  Given all of the problems in Kansas with GOP Gov. Sam Brownback's ridiculous Laffer Curve lunacy that left that the state in a massive budget hole, you'd think other Republican states would back off.

Not North Carolina, no sir.

N.C. Senate Republicans have stuffed a House economic development bill with 46 pages of their own proposals – including lower personal income tax rates, a change in corporate taxes, a new formula for distributing sales tax revenues among counties, and a retooled jobs incentives program. 
The Senate substitute for House Bill 117 – the “N.C. Competes” bill favored by Gov. Pat McCrory – looks far different than the proposal that passed the House in March with bipartisan support. But Senate leader Phil Berger says it represents a compromise between varying proposals for growing the state’s economy. 
“I think there was a lot of give and take in putting this together,” Berger said during a rare appearance at the Senate Commerce Committee, where the new bill was rolled out. “A proposal such as this takes a great deal of compromises, a great deal of working together.” 
The new bill drew immediate praise from the conservative group Americans for Prosperity, which said senators “demonstrated bold leadership today by maintaining this proven path to prosperity with a tax cut proposal.” But the liberal N.C. Justice Center criticized the plan, saying further tax cuts “will hinder the state’s progress” with “a strategy that has failed in many other states.”

So what's in this mess of a bill from the GOP-controlled NC Senate? Check the first two "features":

New sales tax on services: To help pay for new income tax cuts, the bill would broaden the sales tax base. Among the purchases that would face sales taxes: Advertising, veterinary and pet care services, and repairs and maintenance work on personal property such as cars. Large nonprofits, such as hospitals, would lose a sales tax exemption. Collectively, the changes would create $171.3 million each year in new revenue, senators said. A news release from Berger said additional sales tax would “continue the goal of moving away from unfair and burdensome taxes on property and income.” 
Personal income tax cuts: The personal income tax rate would be cut from from 5.75 percent to 5.5 percent beginning in 2016. The standard deduction would increase gradually over a four-year period, meaning a married couple filing jointly wouldn’t owe income taxes on the first $18,500 of income by 2020. A single person wouldn’t owe taxes on his or her first $9,250 in income. “People will have more disposable income in their pockets,” said Sen. Bob Rucho, a Mecklenburg County Republican. “That is a great way to lower the tax burden on working families and small businesses.”

So a $171 million dollar tax increase on service industries, like auto repair, veterinarians, and hospital care, but a big tax cut for those who earn a lot.  It's as regressive as a tax system can be. What this happens to be?  Good old tax cuts for the rich paid for by taxing the poor, period.  It failed in Kansas and unfortunately if this passes it will fail in NC as well.

And a lot of good people back in my home state will be hurt as a result.

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