GREENSBORO — Congressmen Ted Budd and Mark Walker held a press conference last week to discuss the tax reform efforts going on in Washington, D.C. The White House rolled out a series of goals for the most comprehensive tax reform in 30 years that includes doubling the standard deduction, raising child tax credits and lowering the personal and corporate tax rates.
“It’s a bold framework outlining the direction we want to go in the coming weeks and months with the goal of bringing growth that we haven’t seen in years,” said Budd (R-N.C.).
Lt. Gov. Dan Forest, N.C. Sen. Rick Gunn (R-Alamance) and Rep. Jon Hardister (R-Guilford) joined the members of the D.C. delegation to call for N.C. to serve as a model for tax reform at the federal level.
“We believe that the individual earner should be able to keep their money in their pocket, whether they are high-income earners or low-income earners,” said Forest. “We believe that’s best for America and here in North Carolina we’ve been proving that to be the case for some time.”
In 2013 a new Republican-led N.C. legislature started the process of modernizing the state’s tax code during a time that N.C. had the fifth-highest unemployment rate and the ninth-highest personal income tax rate in the country.
“We knew that we had to change course. The logical step was tax reform,” said Hardister. “So we cut the personal income tax. The top marginal rate was 7.75 percent. We cut that down to 5.50 percent this year. Next year it goes down to 5.25. The corporate income tax was 6.9 percent. We cut it down to 3 percent this year. Next year it goes down to 2 percent. Standard deductions, which primarily benefit low-income families, have been drastically increased.”
Critics have said the proposed federal changes would create an even larger budget deficit, something that even supporters concede, saying that that some of the federal reform ideas would initially add to the federal deficit, but they say it will pay off in the end.
N.C. lawmakers heard the same thing from critics who say tax reform and cuts would blow a hole in the state budget. This year N.C. has a $500 million budget surplus and is one of 12 states with a AAA credit rating.
“If it worked here, it will work in our nation’s capital,” said Hardister. “Our work has been praised by the Tax Foundation, Forbes, CNBC, Ernst & Young, and the Wall Street Journal. What we’ve done here can serve as a model not only for other states, but also for members of Congress.”
With three manufacturing megasites in his district, Walker hopes the state and federal tax reform efforts will keep more corporate money in the state.
“North Carolina is the only state in the South that does not have an auto manufacturing plant, and that is something that we need to drive to by reducing that corporate rate and letting more money come back into North Carolina,” said Walker.