New report shows how much NC loses - and how little you gain - from GOP tax cuts | Opinion

In this election year, Republicans will say their tax cuts have made North Carolina a top place for business, but the nonprofit NC Tax & Budget Center says those cuts also have made the state a harder place for people.

In a new report on North Carolina’s 2026 economy, the group assessed the effects of tax cuts on government services and the quality of life.

In short, the center reports that profitable corporations and the wealthy are getting the lion’s share of tax savings while the wider economy is declining or stagnant outside the major metro areas and wages are not keeping up with rising costs.

Alexandra Sirota, the NC Budget & Tax Center executive director, said during a Wednesday press briefing that, Republican-driven tax cuts since 2013 “have significantly reduced state revenue and constrained our ability to invest in the public goods that make life more affordable — including public education, child care, housing, health care, and infrastructure.”

It’s not hard to find the effects of cutting taxes at the expense of services. Ask anyone who’s waited or service at a Division of Motor Vehicles office. Or teachers and state employees whose already low pay has lost ground to inflation. Or state inspectors and corrections officers who struggle to do their work because there are so many staff vacancies.

That tax cutting has strained state services is hardly new. But what is new in the center’s report are the details of how tax cuts are affecting state revenue.

• The Corporate tax rate has fallen from 7% in 2013 to 2% today — one of the lowest rates in the nation. The personal income tax rate has been cut by 1/3.

• Republican tax cuts since 2013 are costing the state almost $18 billion annually and will cost billions more if future cuts are implemented as scheduled.

What do individual taxpayers get for all that lost revenue? Not much:

• Federal and state tax cuts since 2018 means that in 2026 taxpayers earning between $25,000 and $49,000 will save an average of $600. The state’s top 1% of earners will save an average of $74,000.

• In the center’s 2024 poll of taxpayers, 80% said they had not personally experienced any benefit from tax cuts.

The center recommends that lawmakers halt planned tax cuts and instead invest in education, make child care more affordable and raise the minimum wage that has been stuck at $7.25 an hour for 16 years.

With passage of a state budget delayed by a dispute between state House and Senate leaders over the extent of further income tax reductions, Sirota said, “This is a moment for policymakers to decide whether North Carolina’s economy will continue to work best for those already doing well — or whether we will invest in the people whose labor actually makes growth possible.”

Associate opinion editor Ned Barnett can be reached at 919-594-8902, or nbarnett@newsobserver.com