As a former CEO of one of the nation’s largest financial institutions and member of Gov. Mike Easley’s commission to modernize taxes, John Medlin should have done better in his July 20 Point of View article "N.C.’s top tax rate harms bottom line." According to Medlin, North Carolina should do away with the 8.25 percent income tax rate affecting the state’s highest income earners because it is making us "inhospitable" to retirees and small businesses and is unfair to the rich and driving them away. Medlin’s claims are simply not supported by the facts.
North Carolina has been and continues to be a Mecca for retirees and small businesses. The leading voice for small business interests, the National Federation of Independent Business, describes North Carolina’s small business development climate as "favorable." Last week new census data showed that North Carolina’s growth in new housing units from 2000 to 2004 was the ninth highest in the nation (and most of that time the "punitive" 8.25 percent rate was in place) Where is the evidence to support the theory that the "cream of the crop" residents are leaving our state?
While Medlin is correct that reform and modernization of the tax code are essential, the governor’s modernization commission did not, as he implies, recommend cutting tax rates outright, temporary or otherwise, without a parallel move to broaden the tax base to capture a fairer share of all economic activity in the 21st century economy.
N.C. Budget and Tax Center
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