GOP Tax plan nothing but a pretty piggy

Published July 17, 2013

Editorial By News and Observer, July 16, 2013.

You can put lipstick on a pig, it’s said, but it’s still just a pig. In ballyhooing a tax “reform” agreement that seems more a desperate attempt to prove they’re not the gang that couldn’t shoot straight, Republican legislative leaders and Gov. Pat McCrory had the full makeup kit out Monday.

McCrory, who has been mired in limbo while House Speaker Thom Tillis and Senate leader Sen. Phil Berger have reached stalemate on one issue after another, was positively breathless in announcing the deal. He praised everyone in the room.

“Our tax reform plan is not just a tax cut here and there but meaningful tax reform, historic tax reform, that will spur economic development, create jobs and put more money into the pockets of hard-working North Carolinians,” McCrory said. “This will allow employers and citizens to have more money to buy things, to invest in our great state and create a more rewarding life.”

But a close look, in fact, even a cursory look at this “reform” shows the plan is mainly tax cuts – cuts that will most benefit the wealthiest taxpayers and the biggest businesses.

What about revenue?

According to a legislative staff analysis, a married couple with a couple of kids and an income of $60,000 would save $84 a year. But a single person making $250,000 would save $4,000.

The state’s three-tiered income-tax system, properly designed to have those most able to pay take a slightly larger share of the burden, would be scrapped in favor of a flat 5.8 percent rate, dropping to 5.75 percent in 2015. Flat tax rates mean the wealthiest earners pay the same as those with lower incomes. It has long been touted as “fair” by Republicans when it is anything but.

And big corporations are getting a nice nod from the governor and GOP legislators. The corporate income tax rate will drop from 6.9 percent to 5 percent by 2015.

So what’s going to happen to revenue? Republicans would like us to believe that tax cuts will create jobs – a theory that didn’t work too well during the Bush administration – which will lead to a booming economy and more money coming in to the state. They’re apparently not worried about the $2.4 billion drop in revenue the cuts would cause over five years.

That’s going to create the potential for dramatic cuts in government services if the rosy scenario to which the governor subscribes doesn’t come to pass.

Cuts, not reform

This is not reform. This is not revising the tax code to plug holes and ensure fairness and create a system whereby there is reliable revenue from one year to the next. This is simply cutting taxes for the people most able to pay them and pandering to the business lobby. The governor also continues to hype the notion that, by cutting taxes, North Carolina will signal it is “open for business” and be more competitive with neighboring states.

But in a host of rankings from a multitude of sources and surveys over the past five to 10 years, North Carolina has consistently ranked highly in its attractiveness to business. What some who recruit new businesses, particularly high-tech businesses from California or New York, do worry about is the diminishing of the state’s long-standing image as a progressive, innovative outpost in the Deep South. Governors such as Jim Hunt (and two other Jims, Republicans Jim Holshouser and Jim Martin) worked hard to build that image.

Since assuming control of the General Assembly, however, Republicans have delivered ideological legislation such as an anti-gay marriage amendment and cuts to unemployment benefits, in the process costing tens of thousands of North Carolinians extended benefits from the federal government that would cost the state nothing. Because of that action, tens of millions of dollars will be lost to the state’s economy, even as tax cuts siphon more revenue.

The governor can call this reform, but that is using the term with reckless abandon. Even the glossiest lipstick can’t make this pact shine.

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July 18, 2013 at 1:22 am
dj anderson says:

"You can put lipstick on a pig," Obama said in 2008, "It's still a pig." Obama went on, "You can wrap an old fish in a piece of paper called change. It's still gonna stink."

Taxes in NC are still stinking, if not as bad. I'll pay a lot less. Why does it STINK? The admittedly repressive sales tax is still in attendance. Put lipstick on that 78 year old unfair tax to the poor!

Expenditures are another thing for another day. After the sky falls we will pick up the pieces.

Medicaid costs need to be levied separately as costs continue to rise. The amount we are spending on education today is just 1.5 billion more than in the 2006 times of plenty. But in today's lean times, NC is spending 5.1 billion more on Health Care than in 2006. The recession is part of the blame. That's a 12% increase on Education vs 35% increase in health care in a handful of years.

Education is the biggest part of our budget at 28%, and Health Care 2nd at 25%. When cuts are made, like bank robbers, the politicians go to where the money is. Education is losing ground on budget share to health care. Health care costs are not in control. Can we control it? Even today the Governor said yet another shortage of $535 million in Medicaid has been found. The last administration estimated wrong yet again.

How about a plan where the short projection of Perdue of $535 million just announced today will get its money a new way. How about we take that money from the state salaries above $50,000? Can anyone accurate project increases in Medicaid? I'll bet McCrory gets it wrong.

Could we not raise the co-pay for doctor visits and drugs from $1 to $5, and maybe start including a deductible of say, $25 and forbid drug stores or health care providers not collecting it. Maybe that's cruel. Oh, how about we don't license doctors who won't take Medicaid patients, like mine won't take new ones. How about we take 99% of all estates abover $600,000 at death. Spend it or lose it. Give it to the wife or kids before you die. Truly, the state could write a cashier's check to put in the coffin to be presented in person at some future date. Anyone with more than my semi-arbitrary $600,000 can afford to live without it.

I did see where the Republicans are not going to let poor people whose mortgage is over $300,000 deduct that interest from their taxes. Let's put that down to $100,000, or do away with the so called "middle class welfare."

If Reagan had not signed off on the mortgage interest shelter back in 1986, we would not have a 16+ trillion national debt today. That's true, but I'm joking. If the sky is falling, well, let it fall. I'm tired of all the warning of future calamity. Let's live today.