RALEIGH – While it might get scored in a similar way when it comes to the bottom line of a budget, there is a profound difference between giving people free money, and letting people keep more of the money they earn. Pandemic Panic policies have sparked an avalanche of the former in Washington D.C., but state lawmakers are wisely pursuing the latter in North Carolina.
Republicans unveiled a budget proposal to cut personal and corporate income taxes, citing the strong financial position a decade of fiscal conservatism has provided the state. Individual income taxes would drop from 5.2 percent, to 4.9 percent.
More income would be protected from taxes, too, through raising the ‘zero bracket’ limit from $21,500 to $25,500 for individuals, shielding the first $25,500 from income taxes for everyone and completely shielding the lowest-income households income taxes.
The corporate income tax, already a relatively small contributor to state revenues, would be phased out completely by the end of the decade under this proposal.
Senator Paul Newton (R-Union) outlined the budget proposals Tuesday, saying, “Responsible governance also means we’ve come out of the pandemic recession far better off than most states. We have large cash reserves and yet another budget surplus, our sixth in seven years. The Republican philosophy when government takes too much money from the people is to give it back in the form of tax relief.”
That philosophy is not practiced nearly as much as it is preached, even among fiscally conservative Republicans. The incentive for politicians to treat surpluses as free giveaways for more government programs and pork is infamously strong, so the Republican state lawmakers who actually walk the walk here are worthy of a lot of praise.