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Defenders of Justice
Justice Circle Corporate tax cuts aren’t helping N.C.’s economic problems, report says, yet corporations are scheduled to get another tax break.
RALEIGH (May 21, 2018) – A new report on corporate income taxes looks at how corporate taxes have been slashed at the state and federal levels, provides evidence that wealthy shareholders are the prime beneficiaries of corporate tax cuts, and shows that corporate tax cuts have not solved North Carolina’s most pressing economic problems. Unless leaders in Raleigh change course, corporations could be in line for yet another tax cut next year if a rate cut to the corporate income tax moves ahead as currently scheduled.
According to the new report by the Budget & Tax Center, a project of the NC Justice Center, corporate profits are at historic levels, stock prices are through the roof, and plush executive pay has become the norm. At the same time, corporate taxes have been slashed both here in North Carolina starting in 2013 and last December at the federal level.
“Cutting corporate taxes has already failed to make North Carolina an economic leader,” said Patrick McHugh, a Budget & Tax Center Economic Analyst and co-author of the report. “Wealthy out-of-state investors got most of the benefit, the cuts did nothing to address our states’ fundamental economic problems, and as a result, far too many working North Carolinians are still struggling to get by.”
Continued tax cuts for the wealthy and corporations came up last week during the teacher rally and march in Raleigh, as educators demanded more investment in the state’s education system.
“It is time to take a break from the corporate tax breaks and get back to investing in North Carolina’s people and communities,” said Alexandra Sirota, Budget & Tax Center Director and co-author of the report. “By reducing our funding for vital public goods like schools, roads, and healthcare, corporate tax cuts are putting North Carolina’s economic future at risk.”
The report, “Corporations over Carolinians? Why North Carolina Doesn’t Need to Give Corporations More Tax Cuts,” touches on these key points:
- New corporate tax loopholes: What they are and how corporations are benefiting. Many companies bragging about bonuses are actually cutting workers out of most of the benefits: The report includes a breakdown of the numbers for some of the top corporations, showing how much of the tax cuts are going to shareholders, to their employees, to new jobs, and to investments.
- Corporate tax cuts help big companies at the expense of small businesses: Many North Carolina small businesses are not structured to take advantage of these tax cuts, yet they are the key drivers of job growth in the state.
For more information, contact Patrick McHugh, Budget & Tax Center Economic Analyst, at Patrick.mchugh@ncjustice.org or (919) 856-2183; Alexandra Sirota, Budget & Tax Center Director, at alexandra@ncjustice.org or (919) 861-1468; or Mel Umbarger, Senior Communications Specialist, at mel@ncjustice.org.
In case you missed it: Click for a reporter’s toolkit on covering the budget session.
The Budget & Tax Center conducts non-partisan analysis of state budget and tax policy and monitors economic conditions in the state. We produce timely and accessible research that contributes to policy discussions and public debate, with the goal of building a broader understanding of the role of policy in supporting economic opportunity for all.