April 10, 2014 2 Comments
Surprise, surprise, after nice tax cuts for North Carolina’s wealthiest residents, tax revenues are… down. SMH– you mean supply-side economics doesn’t work?!! Oh, and the supposed economic benefits of our lower tax rates were going to create a budget amount to fund teacher raises. Oh well, so much for that. From WRAL:
RALEIGH, N.C. — Tax cuts that state lawmakers passed last year have trimmed the amount of revenue North Carolina is collecting to the point where promised raises for teachers are at risk.
When lawmakers wrote the two-year budget last summer, they left about $360 million unspent for this year, which they planned to use for proposed raises for beginning teachers. That cushion might not be there when the new fiscal year starts in July, however.
Lawmakers likely will have to use $200 million or so to cover another shortfall in the Medicaid budget, and the General Assembly’s Fiscal Research Division has issued a gloomy forecast for tax collections.
Although collections through the end of March were $12.1 million above target, personal income tax is coming in $221 million below forecasts, according to the Fiscal Research Division…
The revenue squeeze is the result of tax cuts included in last year’s overhaul of the state tax system already taking effect [emphasis mine], while other changes meant to offset the impact of the cuts, such as the elimination of several deductions, won’t be felt until people file their 2014 tax returns next year.
Well, who could have ever seen that coming? Gee, if only there were some evidence that cutting (already low) tax rates doesn’t lead to increases in tax revenues. Oh, wait, there is. Who needs evidence when you’ve got Fox News.