Point of View

North Carolina should chart its own course on taxes and spending

June 19, 2013 

While people attending “Moral Monday” gatherings at the General Assembly are derided by some as “outside agitators,” the real outside agitators have been hard at work for months to undermine our state’s economic future.

“Moral Mondays” are a now weekly event where North Carolinians raise their concerns about the direction state policy is taking and protest the failure of many elected officials to recognize the growing discontent among North Carolinians frustrated by a legislature pursuing the interests of a few over the many.

And it is a legislature that appears to be under the sway of national groups – Americans for Tax Reform, the American Legislative Exchange Council and the Tax Foundation, to name three – intent on bringing to North Carolina such failed policies as tax cuts for the wealthiest people and most profitable corporations that would drastically reduce the quality and capacity of public services crucial to widespread prosperity. They would remake North Carolina with an agenda that abandons what has made our state so attractive over the years to families and businesses.

Whether it’s shoddily researched reports by supply-side economics guru Arthur Laffer or inflammatory rhetoric during visits from Grover Norquist – he of the infamous “no tax” pledge that hamstrings legislators – the influence of outsiders in North Carolina is pervasive. These people and organizations are trying to make the state the latest test case for extreme measures in the guise of “reform.”

Their templates are the origin of proposals being made in North Carolina that would benefit the rich by exempting from taxes income claimed on business owners’ personal tax returns, eliminate the personal and corporate income tax, and thwart democracy by requiring a two-thirds legislative vote to raise taxes instead of a simple majority.

Such a cookie-cutter approach to policymaking fails North Carolinians in many ways. It fails to account for the distinctive mix of industries and diverse regional economies that define our economic challenges and drive job creation here. It ignores our state’s history of deep commitment to public education. And it fails us because it has failed other states that chose to abandon tried and true investments in the future in favor of quick fixes and the instant political gratification of tax cuts that don’t produce the job growth supporters promise.

Proponents say the tax cuts now proposed in North Carolina will usher in a period of great prosperity, fueled by cuts in government spending. It’s a fantasy. In states that pursued these policies such results never materialized. It’s a fact: States that cut taxes in the 1990s grew more slowly than the national average. It’s a fact: States that adopted an agenda of giving big tax breaks to the wealthy haven’t experienced employment growth. It’s a fact: What such states did get is lower household income.

To improve North Carolina’s economy right now and into the future, we don’t need to import bad ideas from other places. Instead, we need to turn to solutions that we know work; that reflect the nature of our state’s economy and our state’s needs – not the imaginings of those who would impose a “one-size-fits-all” approach.

A good start would be to recognize that job creation requires investment that supports emerging, high-growth industries by developing a trained workforce for the 21st century economy. It takes connecting businesses with the innovation found at our research universities and sharing ideas with others. It means expanding small businesses already on the ground in North Carolina, encouraging entrepreneurs to take the risk of start-up. Strong small business networks, access to capital, making sure minority and rural communities benefit from economic growth – all of this is the recipe for a strong North Carolina; not empty rhetoric that claims ending investments made over generations will restore our state’s greatness in a complicated global economy.

The assets we need to solve our economic challenges are right here. We just need to nurture and preserve them. Our university system and community colleges, transportation networks, safe communities and support for public-private partnerships – they all have served to expand opportunity.

Over the years leaders from both political parties in North Carolina made the decisions needed to invest in our state. They had an abiding sense of the public good, arrived at by listening to the people of our state. This is no time to stop listening, no time to give over leadership of our state to the failed agendas of outside “experts” who don’t know the difference between eastern and western North Carolina barbecue or how to pronounce Beaufort and Topsail.

Alexandra Forter Sirota is director of the N.C. Budget & Tax Center of the North Carolina Justice Center, an organization that advocates on behalf of low-income and disadvantaged communities.

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