The United States Needs Tax Reform
Earlier this week I joined Congressmen Ted Budd and Mark Walker for a press conference to talk about tax reform. We discussed the success of tax reform in North Carolina and how it can serve as a model for reforming our nation’s tax code.
The press conference was held at PTI-Greensboro. Lt. Governor Dan Forest and Senator Rick Gunn were also present for the event.
Below is a transcription of my comments at the press conference:
Comments on Tax Reform:
For a period of time, North Carolina had the 5th highest unemployment rate in the country. We had the highest tax burden in the Southeast. We had the 9th highest personal income tax in the country. As a result of that, we had double-digit unemployment. We had budget deficits and the state GDP was stagnant.
We knew that we had to change course. The logical step was tax reform.
So we cut the personal income tax. The top marginal rate was 7.75 percent. We cut that down to 5.50 percent this year. Next year it goes down to 5.25.
The corporate income tax was 6.9 percent. We cut it down to 3 percent this year. Next year it goes down to 2 percent.
Standard deductions, which primarily benefit low-income families, have been drastically increased.
We cut and capped the gas tax. We eliminated the estate tax.
Our detractors when we were doing all of this said, “You know what? The state’s going to lose revenue. It’s going to hurt the economy.” That’s the opposite of what happened.
So what did happen? Since cutting taxes, our state’s GDP has been one of the fastest growing in the country. We have the 23rd largest economy in the world. Over 400,000 net new jobs have been created.
Unemployment has been cut in half, and is currently at a 16-year low.
We had a budget surplus of over $500 million this year, after cutting taxes.
We are one of only 12 states that has a Triple A credit rating from all three agencies. And recently the Census Bureau indicated that per capita income in North Carolina is rising faster than the national average.
The bottom line is that lower taxes encourage economic activity. Lower taxes recruit new business, and make it easier for existing businesses to grow. Allowing individuals to keep more of the money they’ve earned builds consumer confidence and strengthens the economy.
Cutting taxes is not a partisan opportunity. It is an American opportunity that will create jobs and strengthen the economy. We cut taxes in North Carolina with bipartisan support, and the impact on our economy has been outstanding. Our state is growing, budget revenue is steady and jobs are being created.
If it worked here, it will work in our nation’s capital. Our work has been praised by the Tax Foundation, Forbes, CNBC, Ernst and Young and the Wall Street Journal. What we’ve done here can serve as a model not only for other states, but also for members of Congress.
– Rep. Jon Hardister, comments from October 10th press conference