If there’s one thing Republicans profess to hate, it’s taxes. Just two years ago, Republicans in the N.C. General Assembly passed a fundamental overhaul of the state’s tax system, eliminating the state’s longstanding progressive tax rate—meaning rich people pay a greater percentage of their income in taxes—and replacing it with a flat tax, reducing corporate income taxes, and eliminating the estate tax, all under theory that doing so would prime the state’s economy.
Here’s what Grover Norquist, whose goal is to shrink government to the point at which you can drown it in a bathtub, had this to say when Gov. McCrory signed the tax reform plan:
“For decades in North Carolina, taxes only went in one direction: up. Fortunately for North Carolina taxpayers, the state is under new management and, as this pro-growth tax plan demonstrates, open for business again. North Carolina lawmakers will head home from Raleigh this Summer having delivered on one of their top campaign promises. Members of Congress and national pundits continue to debate the prospects for tax reform in Washington, I commend North Carolina lawmakers for demonstrating what pro-growth tax reform looks like.”
They paid for this—well, sorta; the state may still end up close to $1 billion in the red this year when all is said and done, according to analysts at the NC Justice Center’s Budget & Tax Center, a left-leaning policy shop—by eliminating myriad tax exemptions, the Earned Income Tax Credit, and tax credits for child care, disability, property taxes on farm machinery, as well as deductions for college savings plans. (As Democrats have happily pointed out, deductions for yachts and private planes remained intact.) And now Senate Republicans are pursuing another round of tax reform, further cutting the individual and corporate tax rates and costing the state another $1.4 billion in badly needed revenue.
But while Republicans have very loudly and repeatedly proclaimed the benefits of their tax reforms—which haven’t produced nearly the predicted economic shot in the arm, surprise—North Carolinians aren’t feeling it.
According to a new PPP poll commissioned by Progress NC, 60 percent of North Carolinians, including half of Republicans, say their taxes went up in the last year. Only 8 percent believe they went down.
A survey that relies on respondents’ memories of their year-over-year taxes may be prone to negativity bias, but the data back up the poll’s claim: According to the BTC, families making less than $84,000 a year saw their state taxes go up; meanwhile, State Rep. Larry Hall said at a press conference this morning, two-thirds of the tax reform plan’s benefits have accrued to those making $900,000 per year and up. (A state fiscal analysis found that the plan would indeed raise state taxes on some seniors and married couples with children.)
“A working family in North Carolina can’t get a break,” Hall said.
Neither can retirees like Ken Cowick of Cary, 75-year-old in a wheelchair who says his taxes rose by 426 percent from last year to this year, while his and his wife’s joint income rose just 1.06 percent, thanks mainly to the elimination of the medical-expenses deduction. He pushed the Legislature to pass HB 46, which would restore that deduction for seniors (though not for everyone).
Joyce Adams, a widower who, with her son, runs Adams Vineyards—which bills itself as “Wake County’s First Vineyard and Winery”—said that the farm-machinery deduction elimination hit her and her son pretty hard, too. “I have no salary,” she added. “We are not able to get enough to pay me.”
“The response we’ve seen is, No. 1, to attack the messenger,” said Logan Smith, Progress NC’s communications director. “No. 2, pretend these folks don’t exist.”
I have emailed the poll to Gov. McCrory’s press office and will update this post as soon as they respond.