While the N.C. House and Senate continue to deliberate on tax cuts for businesses, a group of the wealthiest residents of the state are making a push to eliminate the cut for the good of the working class.
On Monday, 24 members representing the top 5 percent of North Carolina based on income and assets wrote a letter to the state’s General Assembly, asking for the tax cut to be kept for more pressing needs.
The letter stated, “It is not fair to the majority of our residents to decrease our tax load at the expense of our public schools’ ability to educate our children, or our local governments’ ability to provide services without raising taxes, or our most vulnerable citizens’ ability to obtain health care and other life-saving services.”
The House and Senate are trying to find an agreement on the tax reform bill HB 998, but the corporate tax plans have major contrasts. The House would lower the corporate tax — which is currently at 6.9 percent — to 6.5 percent next year and drop rates gradually each year, ending at 5.4 percent in 2018. The Senate wants to lower the corporate tax to 6 percent, decreasing rates each year until eliminating the tax completely in 2017.
There hasn’t been a lot of response from the House or Senate on the letter, but Director of N.C. Budget and Tax Center Alexandra Sirota said the wealthy writers had solid reasoning.
“We haven’t heard much from lawmakers, but we know these taxpayers felt it was important to express their information and concern,” Sirota said. “They could benefit from the tax cut, but they want dollars sent toward public schools and infrastructure to make North Carolina great.”
Sirota also said a tax cut for major corporations wouldn’t be financially sound for the state.
“We’ve conducted analysis of tax policies and tax cuts for the wealthy won’t create economic growth and jobs for the community,” Sirota said. “We’ve seen other states experiment with it and it’s too risky for North Carolina to undertake.”
Deputy Communications Director Ryan Tronovitch released a statement from Gov. Pat McCrory to The Free Press on Tuesday, which stated, “Governor McCrory remains focused on a tax reform plan that puts more money in the pockets of hard working North Carolinians and make it easier for businesses to create jobs.”
N.C. Sen. Don Davis, D-Greene, concurred with the letter, saying there should be more of a focus on school systems.
“I couldn’t agree more with the content of the letter,” Davis said. “I believe it’s important to make investments in our public education along with our world-class colleges and universities. We have to make efforts to assure we maintain the state’s vital infrastructure. Things are things I’ve shared and articulated in the past and will continue to articulate. We’re crippling our future if we don’t invest in public education and make North Carolina a better state.”
The House and Senate will continue to negotiate, but will now have another set of opinions to analyze.
Junious Smith III can be reached at 252-559-1077 and Junious.Smith@Kinston.com. Follow him on Twitter at @JuniousSmithIII.