The Corporate Income Tax: Repeal, Not Reform
A good deal of discussion of late has centered on reforming North Carolina’s tax code, and that is a good thing. There is no aspect of North Carolina’s tax system not in need of significant change. The current code penalizes worker productivity while placing multiple layers of taxation on saving, investment, and entrepreneurship. Members of both political parties are acknowledging these arguments, and there seems to be a real possibility that in the coming few years we could see significant changes made to North Carolina’s tax code.
Nevertheless, there is one aspect of North Carolina’s system of taxation that needs more than reform, and that is the state’s 6.9 percent tax levied on the income of corporations. The corporate tax should be repealed, not reformed.
It violates all basic principles of sound economic policy and open government. It not only imposes a second and even a third layer taxation on many people’s incomes, but it is hidden, dishonest, and inconsistent with informed decision making in a free and democratic society