The phrase “robbing Peter to pay Paul” comes to mind when looking through the latest budget attempts by the Senate. In only a few short days, the Senate as moved this piece of legislation at lightening speed, and we’re only now really catching up with the details.
To call the current budget “compromise” anything but disastrous is being too kind. As it currently stands, the Senate version pulls a bit over $250m from a number of sources and plugs a few holes in education. However, it leaves as many holes as it plugs in areas suck as the Rainy Day fund, school constructions funds, and the Golden LEAF fund. In other words, it solves problems of budget cutting with cuts in other areas. Completely and utterly inadequate.
Of course, we are only comparing it to the original version from the House, and only slightly more ambitious version from the Governor. We didn’t like the Governor’s original proposal for a number of reasons, but we’d happily stab Peter in the back to get that as an option today.
The problem with all if this is that this budget, and this entire legislative session, has done nothing about North Carolina’s number one problem: lack of jobs. While Republicans and say all they want that cutting taxes is the solution to every budgetary problem on the face of the earth, those of us who live in the real world know it’s not. According to the Tax and Budget Center,
Contrary to the claims of Senate leadership, cutting taxes will not create jobs. That’s because any jobs created through tax cuts will be more than offset by the jobs lost by cutting back on vital public investments. As the Budget and Tax Center reported a few weeks ago, the one-sided analysis used to support the claim that tax cuts will create jobs completely ignored the economic and jobs impact of cutting public investments and greatly overstated the impact of tax cuts on jobs.
In other words, we are cutting so much vital infrastructure that it will cause a net loss in jobs, not a gain. New jobs do not always equal more jobs.
Not only will the Senate tax-cut plan fail to create the jobs North Carolina needs, it also fails to address the long-term shortcomings of the state’s revenue system. The proposal on the personal income tax is not a first step to modernization. Instead of closing or limiting ineffective tax loopholes, the Senate tax plan only changes the tax forms necessary to take advantage of them by converting the basis for calculating income taxes from federal taxable income to Adjusted Gross Income (AGI) while retaining all but a few loopholes.
Furthermore, two-thirds of the benefits of the proposal to cut the state’s personal income tax rates would benefit households in the top 20 percent of the income distribution. Furthermore, the resulting loss of more than $400 million in annual revenue forces even more drastic and unnecessary cuts in public investments without any promise of creating jobs.
Come on guys – trickle-down economics didn’t work in the ’80′s and it’s not going to work now.
The rich get richer and the rest of us get poorer, and poor Peter doesn’t stand a chance.
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