Who NC Republicans Work For

By GENE NICHOL

April is, of course, tax time. I assume, given that, it must be something of an abbreviated bragging season for North Carolina Republicans. As they explain to the broader world, they’re tax cutters – first, last and always. Enjoy our handiwork.

I imagine a quiet conversation between a party operative and a young I-banker or an older country club Republican: “I know you may not be thrilled about our racism or our homophobia or our rhetoric about abortion or our rejection of science, but it’s worth it, right, to get the massive tax cuts?” Nothing comes for free. If wealthy folks want more money, you have to put up with a little revitalized bigotry. It’s a complex world.

Given that centrality – this core of the new Republicanism – it is worth exploring the particulars of some of the last seven or eight years of North Carolina tax policy. Here goes.

But first a morsel of perspective.

We may be one of the most economically vibrant states in the richest nation on earth, but over 21% of North Carolina’s children live in poverty. The figure is even worse for children under five. Almost 23% of our kids suffer from hunger. Four out of 10 of our children of color are poor. Almost half of all North Carolina kids are classified as poor or near poor (under 200% of the federal poverty threshold). Our youngest members are the most vulnerable. Their hardship is more pronounced than in almost any advanced nation.

The top 1% of Tar Heel households, on the other hand, capture about 18% of all our state income. They average incomes of $902,972 per year. The other 99% of North Carolina households enjoy an average income of $43,550. This represents our greatest income inequality since 1929.

So, what are the results of our much ballyhooed and much altered state tax structure?

In the last reporting year, the poorest quintile of Tar Heels paid 9.5% in state and local taxes. Their average income was $11,400. The middle quintile paid 9.4%. Their average income was $40,100. The richest 1% paid 6.4% in state and local taxes, on incomes of $1,085,000.

Our adoption of a flat 5.25% state income tax rate gave NC millionaires an average annual reduction of $23,600. The middle quintile of taxpayers, in turn, got less than a hundred bucks. When we eliminated the state earned income tax credit, 970,000 working families making about $30,000 a year (including 1.2 million kids), had their tax bills raised by the General Assembly. Our corporate income tax rate was 6.9% in 2013. Now it’s 2.5%. More than 80% of the reduction goes to wealthy out-of-state folks.

These are tax cuts, of a sort. They just aren’t aimed at most Tar Heels. They are notably and repeatedly regressive in impact. They provide major solace only to a relative handful of the very wealthiest citizens. Our lawmakers boast of a defining tax-cut identity. But the tag is as deceptive as their odd claim to be “constitutionalists.” In truth, they serve the top 5% and essentially mislead everybody else. They’re agents of the wealthy and the already potently empowered. They seek to further rig a famously rigged system. Apparently they’re glad to get the work.

It would be interesting to imagine a truth-in-advertising requirement for political leaders. The first amendment, of course, would never abide it. But it would be heartening to see a lapel button crafted specially for the NC General Assembly: “We work exclusively for the rich and powerful.”

Gene Nichol is Boyd Tinsley Distinguished Professor of Law at the University of North Carolina School of Law and in 2015 started the North Carolina Poverty Research Fund after the UNC Board of Governors closed the state-funded Poverty Center for publishing articles critical of the governor and General Assembly.

From The Progressive Populist, June 1, 2019

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