Blog: North Carolina: An Example for Tax Reformers

Statement

This year, North Carolina legislators dramatically altered the state's tax system, replacing a very burdensome policy on both individuals and businesses, with one which sets the state up for long-term economic growth. As Washington continues to pursue federal tax reform, it is encouraging to see reform accomplished in the Tar Heel State.

Personal and corporate income tax rates were each lowered in a plan that cuts taxes by about $4.75 billion over five years, according to Dr. Ray Cordato of the John Locke Foundation.

With these reforms in place, North Carolina has lost the distinction of having the highest top marginal income tax in the South-East U.S., a tax which is essentially "a penalty on productive activity of all kinds," explains Dr. Cordato. Instead of transferring taxpayer dollars to government bureaucracy, these reforms will keep earnings in the private sector, where North Carolinians will be able to invest them, create jobs and spur the economy for long-term growth.

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