RALEIGH – The Left can be counted on to have heartburn over cuts to corporate tax rates. We see as much each time the rate here in North Carolina ratchets lower thanks to tax reform schedules set into motion by Republican majorities.
As a result, North Carolina derives less and less revenue from these taxes – and that’s good for business. Not the “Evil Corporations” the Left loves to hate, but the thousands of small businesses across the Old North State that pay this tax.
What would be better than the recent cuts? Ditching the tax altogether.
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Check out this information from the Civitas Institute on the recent revenues from corporate taxes compared to other states.
“The Tax Foundation yesterday posted data on state corporate income taxes paid per capita. North Carolina finished 31st highest, with $105 in corporate tax collections per capita.
Unsurprisingly, collections were highest in New Hampshire at $525 per capita and Massachusetts at $342 per capita. Data is taken from fiscal year 2016.
In that year, North Carolina collected about $1 billion in corporate income taxes, down from $1.3 billion the previous year. In 2016, the corporate income tax rate rate dropped to 4%, down from 5% the year before, 6% in 2014, and 6.9% in 2013. These changes came courtesy of the 2013 tax reform.
Today, the corporate tax rate is 3%, and set to fall to 2.5% in 2019.
For fiscal year 2017-18, corporate tax collections dropped to $739 million – only about 3% of total state tax revenue.”
Three quarters of a billion dollars is not a small amount of money, but the cost/benefit analysis surely favors eliminating the tax altogether. Just think of all the man hours and money spent by business owners in order to comply with this tax – for 3 percent of revenue.
Should Republicans maintain strong majorities in the legislature post-2018 elections, repealing the corporate income tax should be one of the first things on their agenda come 2019.
Read more here.