Stop the bleeding: The last thing North Carolina needs right now is another round of big tax cuts
Published April 22, 2021
If you’re an American of a certain age, you may remember one of the zanier TV comedy sketches of the late 2oth century in which the great Steve Martin joined some of the early Saturday Night Livecast members in the role of “Theodoric of York, Medieval Barber.”
If your memory has faded or that was before your time, don’t fret, you can always find it online or catch a more modern iteration (though sadly, not for laughs) over at the North Carolina General Assembly, where Republican leaders are attempting to reprise the Martin role.
You see, the premise of the Theodoric sketch – a premise based, sadly, on some bizarre historical truths – was that, prior to the advent of modern science, early “medicine men” inflicted all manner of crazy and often counter-productive “therapies” on their “patients,” including Theodoric’s favorite cure-all: “a good bleeding.”
In the sketch, Martin casually prescribes a monthly bloodletting to accompany one willing customer’s haircut and then causes the death of another suffering from what appears to be anemia by applying the same prescription.
The obvious modern parallel for the grim history Martin’s dark humor highlighted, of course, is the fiscal policy that’s been pursued for the last decade by our one-trick-pony legislature.
You know how this goes. Time and again, no matter the circumstance or the ill that afflicts the state, the prescription offered by Republican politicians and the conservative ideologues and business lobbyists who serve as their cheerleading enablers is the same: tax cuts.
Times tough and state revenues flagging? Must be a good time for a tax cut to “stimulate the economy.”
Things going a little better and receipts running ahead of projections? Sounds like another good time to cut taxes.
Public programs struggling to deliver essential services like education and transportation? Another obvious time to spur efficiency in government and promote “competition” by cutting taxes.
Or consider the current situation.
At present, North Carolina is struggling to recover from an unprecedented public health crisis that has claimed more than 12,000 lives and hundreds of thousands of jobs. Thousands of families face eviction and homelessness. Hundreds of thousands lack access to basic healthcare. Hunger remains a large and widespread problem. Unprofitable businesses need assistance.
Meanwhile, the state’s public structures and systems battle chronic fiscal anemia. The school system faces a shortfall of billions and has been found to be in longstanding violation of the state constitution. Affordable childcare for working families provided by skilled and well-paid providers is almost nonexistent. Massive environmental challenges continue to multiply.
And the General Assembly’s prescription for this situation? Why, a good bleeding of the public coffers, of course.
As Lucille Sherman of Raleigh’s News & Observer reported recently, Republicans in the North Carolina House are even fighting amongst themselves over a new tax cut proposal that would directly benefit several members of the General Assembly by forgiving state taxes on federal pandemic relief benefits.
This comes on top of another GOP proposal to further slash the state’s already pared down income tax with another rate reduction and standard deduction hike. These proposals, in turn, come on the heels of a long series of individual and corporate tax reductions enacted over the last several years.
As I’ve noted previously, the cumulative impact of these tax cuts has been a massive reduction in public investments. When one looks at the best measure of state’s ability to pay – the size of its economy – North Carolina’s current public investments come in nearly 22% below the 45-year average (a period that includes a decade of GOP austerity). When compared to the three-and-a-half decades before that, the falloff approaches 30%.
At such a moment, the last thing North Carolina needs is yet another crude, across-the-board fiscal bloodletting. That would take billions more out of essential public services and structures and provide yet another windfall to the state’s wealthiest residents – a group that’s largely prospered during the pandemic.
This isn’t to say that tax reductions are always a bad idea. Especially given North Carolina’s upside-down code in which the richest individuals pay much less of their income in state and local taxes than the middle class and the poor, a proposal to raise income taxes slightly on the well-off while providing a targeted reduction to low-income working families via a state earned income tax credit – as envisioned in recently introduced legislation entitled “A Tax Plan for a Just Recovery” – makes good sense.
Unfortunately, as with medieval healthcare practitioners – both real and parodied – the idea of a surgical approach that includes not just bloodletting, but transfusions, appears to be beyond the capacity of GOP lawmakers.
One can only hope that it won’t take centuries for them to grasp this basic concept.