Dear Senator:
On behalf of National Taxpayers Union’s nearly 8,800 North Carolina members, I urge you to support the substantial taxpayer relief proposals currently before the North Carolina Senate. Both the Senate and House plans would lower personal and corporate income taxes, cut the franchise business tax, and lower the sales tax rate while broadening the base. Reducing taxes would make North Carolina a better place to start a business, and a friendlier environment for overburdened taxpayers.
Families continue to contend with eroded incomes, and unemployment remains dangerously high in the Tar Heel State; that is why North Carolinians need pro-growth tax reform now more than ever. The state’s top individual income tax rate is higher than that of any state in the South, and a significant reduction of the top rate would provide taxpayers much-needed relief while improving the state’s economy and creating jobs. According to the American Legislative Exchange Council’s Rich States, Poor Statesstudy, from 1999 to 2009 the nine states with no personal income tax—including nearby Tennessee and Florida—experienced an average rise in gross state product of 61.2 percent, while the nine states with the highest personal income tax rates grew by only 44.9 percent.
Additionally, states without income taxes have actually outpaced their counterparts in terms of revenue growth. From 1999-2009, states without income taxes saw a 123.7 percent increase in total tax collections compared to the national average of 70.2 percent. When combined with ongoing expenditure restraint, this kind of strong economic and revenue performance is a recipe for consistently stable and balanced budgets. Any movement in this direction could go a long way towards securing North Carolina’s fiscal future.
Furthermore, legislators should strive to make the Old North State a better place to start and expand a business. Lowering the corporate tax and franchise tax rates would benefit all businesses in the state, regardless of what they might manufacture, deliver in services, or sell to consumers. In a new report by non-partisan Tax Foundation, economists found that tax reform in North Carolina would greatly improve the state’s abysmal rank of 44th in their State Business Tax Climate Index – to 13th under the Senate plan and to 19th under the House plan.
By implementing one of the boldest state tax reform plans of 2013, North Carolinians would be given some much-deserved financial relief, which is especially important in light of rising federal tax rates and soaring health care costs. The time is now to pass the most important tax cut in state history!
Sincerely,
Lee SchalkState Government Affairs Manager
cc: Governor Pat McCrory