Tuesday, January 18, 2022

Will Gov.-elect Cooper propose 'fair share' tax policy?

— Gubernatorial candidate Roy Cooper railed against Gov. Pat McCrory and other Republicans for approving an income tax-cut bonanza for the wealthiest North Carolina residents and “corporate tax giveaways” while he says public education suffered.

“Raise your hand if you believe those at the top should pay their fair share,” the Democrat said in a TV commercial this year. “Raise your hand if you agree that tax breaks should be going to the middle class.”

Now governor-elect, Cooper is repeating he wants to work with the GOP-led General Assembly to locate tax cuts for working people and small businesses.

But making those at the top pay their fair share? What he’ll propose, if anything, seems less certain.

If “fair share” means turning back up individual and corporate tax rates that Republicans have lowered — including further reductions that begin the day he takes office — Cooper told The Associated Press “that is not going to happen.”

“We don’t have any plans to try and change the law that’s already in place in those areas,” Cooper said in a phone interview a couple of days after McCrory conceded their race.

With Republicans who approved the cuts still holding veto-proof majorities next year, Cooper will have limited leverage on any tax changes. But whatever Cooper proposes will set the tone for his administration and his relationship with the legislature.

A three-tiered individual income tax system with a top rate of 7.75 percent in 2013 is now one flat rate of 5.75 percent. The 2013 corporate income tax rate of 6.9 percent is now 4 percent. State law also directs rates to fall Jan. 1 to 3 percent for corporations and a hair under 5.5 percent for individuals.

Republicans said previous rate reductions gave all wage-earners more in their pockets and encouraged corporations to create jobs. But Cooper and other Democrats say the reductions benefited the wealthiest even as per-pupil spending lagged behind pre-Great Recession levels. Other laws Republicans approved also expanded the number of services subject to the sales tax. Cooper said tax changes that hurt small business and the middle class need to be reconsidered.

Republicans are “giving to those at the top while forcing everyone else to pay more and get less,” Cooper said at his October 2015 campaign kickoff event. These and similar comments raised questions whether Cooper’s proposals to pay for both middle-class tax breaks and to move teacher salaries to the national average would require tax increases.

“If he’s coming forward with what he promised in his campaign, which sounds like to me a huge tax increase, I don’t see where we will find any common ground,” Senate leader Phil Berger, R-Rockingham, said in an interview.

Cooper said during a televised debate in the campaign’s final weeks that “we do not need to increase taxes” to meet his goals. He said they could be accomplished through the growth in tax collections as the economy improves and by setting the right priorities.

“I have been very consistent,” Cooper said last week.

Cooper will propose a two-year state budget proposal early next year. Whatever is inside, Cooper will bring a different perspective on tax policy compared to Republicans, said Chris Fitzsimon with the liberal-leaning NC Policy Watch group. He believes Cooper will examine what’s needed to pay for long-needed investments in education first before evaluating what to do about taxes.

“His battle is going to be in framing the debate,” Fitzsimon said.

A special thank you to our friends at WRAL for helping out with this post.

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