We know that lower taxes mean more economic growth. Academic studies support this. A new report from the Tax Foundation further supports the notion that low, neutral taxes are better for a growing economy and income equality is actually higher with more progressive income taxes.
Economic evidence shows that low, neutral taxes on consumption typically have the least damaging impact on the economy, while high, progressive income and corporate taxes damage economic growth the most.
(Income) Inequality varies little between states, and states with highly progressive income taxes are actually associated with higher inequality.
Most flat tax states have excellent government finances….Flat-tax states like Utah, North Carolina, and especially Indiana have all managed to pay their bills and retain AAA credit ratings.
Ultimately, state financial health depends not only on tax rates but tax structures (volatile taxes like progressive income taxes encourage overspending in good economic times, causing a deficit during economic contractions), spending policy, division of responsibilities with the federal and local governments, and financial management.
Just more of the growing evidence that North Carolina’s recent public policy decisions have us on the right track for economic recovery and long term growth.