Advice from a Sinking Ship

You have to admire their brass. The Charlotte Observer, which like many newspapers has been struggling to make ends meet, took a break from terminating paper deliveries and selling off prime real estate to offer business advice to the State of North Carolina.

First, the Observer’s editors tore into President Trump’s Tax Cut, specifically cutting taxes on businesses. Then the Observer tore into Republicans for doing the same thing in North Carolina. We’d all be better off, the Observer argued, if taxes were higher because more money would be flowing into state government.

But they left out a key fact. After Republicans in the General Assembly cut taxes the economy boomed and, as a result, state government had a boost in tax revenues. This spring, a $900 million budget surplus fell in state government’s lap. The State Senate then voted to return a part of the surplus to taxpayers to help working families. But Governor Cooper turned thumbs down on that idea and vetoed the bill.

The State Senate also, since North Carolina is in the worst half of all states in terms of its property tax burden, voted to cut the double property tax on business. But, again, Governor Cooper vetoed the bill.

Six years ago, Senate Republicans cut taxes to turn a terrible economy into a booming economy. It worked. And businesses started moving to North Carolina.

Then we hit two bumps in the road. First, when other states saw how successful we were, they cut their own taxes. And, second, after Roy Cooper was elected Governor, trying to keep our taxes low in order to be competitive with other states went out the window.

Six years ago, North Carolina’s ‘Tax Competition Ranking’ was 44th out of the 50 states. In other words, our state taxes were higher than 43 other states. After the Republican tax cuts, we leaped to 11th – suddenly, our taxes were lower than 39 other states. Over the past two years, under Governor Cooper, North Carolina has fallen from 11th to 15.

It’s a good idea to drain the swamp before we drown in it.

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