When it comes to the John Locke Foundation’s latest study examining the income distribution of North Carolina’s 2013 tax cuts and reform legislation, it is clear that at least some leftist commentators have decided to advance a narrative about the conclusions of the study that misrepresents [lies about] what the study actually shows.
The conclusion of our analysis is that, by itself, the 2013 reforms will end up cutting taxes to every income group starting with those earning less than $25,000. The study then goes on to show that if one includes the reduction in the sales tax rate from 5.75% to 4.75%, which Governor Perdue and the Democrats tried to keep from occurring, the tax reductions attributable to Republican takeover of the legislature are even greater and more beneficial, particularly to lower income households.
But this is not what some leftist commentators wanted to report about our study. What they wanted to say is that the only way our analysis could show a tax cut for lower and middle income households is to lump together the 2011 sales tax reductions and the 2013 tax reform plan, implying that the 2013 changes considered alone raised taxes on the poor. A good example of this sleight-of-hand is a recent article by syndicated columnist Scott Mooneyhan where he states the following:
“It’s simply false to claim that recent tax changes in North Carolina are allowing the well-to-do to get their taxes reduced ‘on the backs of’ lower- and middle-income groups,” wrote Locke Foundation vice president Roy Cordato.
By recent, Cordato meant not just the huge tax overhaul that state lawmakers approved last summer. He included the Republican-controlled legislature’s decision to allow a sales tax hike to expire in 2011.”
What Mooneyham implies is that without the 2011 changes my statement would not be true and that our study had to include the 2011 sales tax reduction in order for me to make the claim that I do. First here is the non-technical summary of the study, which includes a summary of the methodology that was used to conduct it. Below are statements from the study that I guess Mooneyham missed, assuming he read something other than the press release that accompanied it.
- Tax reform passed in 2013, and now going into effect in 2014, will lead to a tax cut for the average North Carolina household in every income category.
- In 2015 households earning less than $25,000, the lowest income category, will have a total annual tax saving from the 2013 tax reform of $79 million. Those households earning less than $50,000 per year, that is lower- and lower middle-income households combined, will see an annual tax cut beginning in 2015 of more than $147 million.
- The average household in every income group from bottom to top is seeing its tax burden reduced from both the 2011
decline in the sales tax rate and the 2013 tax reform package.
- A typical household in the lowest income group earning about $12,500 a year will have its North Carolina state tax burden reduced in 2015 by $135 with roughly equal amounts of saving coming from the 2011 and the 2013 tax changes.
In analyzing the reporting by Mooneyham and others my colleague Mitch Kokai suggests that they may have problems with reading comprehension. There are two other possibilities. They didn’t actually read the study or they did read it and are willfully misrepresenting its conclusions. Mitch’s interpretation is the kindest, but that’s just the kind of guy he is.
But the fact is that Mooneyham’s article is not primarily about this issue, which is really just mentioned in passing. According to him our study claims that there will be no losers, that no one will end up paying higher taxes as a result of the 2013 reform. Not surprisingly, he provides no quotes from anything we have published to support his assertion. That’s because it’s false. Apparently to “prove us wrong” Mooneyham constructs a scenario where a family in a particular kind of situation will end up paying more. In response to this I would like to, once again, directly quote from the report that I wrote.
“It is not being claimed that every household in every income group will see its taxes go down as a result of these changes. This would be an extremely unlikely result for any set of tax reforms. Depending on particular circumstances,there are households in every income category that will end up paying more as a result of recent changes. Clearly, someone could construct particular household scenarios that would demonstrate that result. And dishonest politicos could and will use these scenarios to imply that special cases are typical.”
Wow, am I prophetic.
PS–Lack of reading comprehension skills, not actually reading the paper, or willful distortion. You decide.