NC in Top Ten for Business for First Time
For the first time ever, North Carolina has ranked in the top ten states for competitive business tax climates, according to the non-partisan Tax Foundation. This is a five-point improvement over last year, when the state ranked fifteenth. As recently as 2014, North Carolina state ranked 44th.
“The state House’s successful vision for a new economic era in North Carolina benefits millions of families and businesses in our state,” said Speaker of the House Tim Moore.
The index from the Tax Foundation is an amalgam of other rankings, including the corporate tax rate, the individual income tax rate, the sales tax rate, the property tax rate, and the unemployment insurance tax rates; North Carolina ranks fourth in the nation for corporate tax rates.
So what happened in 2014?
2014 was the year that North Carolina’s conservative-led legislature implemented a series of pro-growth tax reforms that lowered everyone’s income tax rates, widened the sales tax base, tripled the standard deduction, and restructured the tax code by eliminating old-fashioned progressive tax brackets and replacing them with a simple flat tax.
The effects were almost immediate. These historic conservative tax reforms propelled North Carolina from 44th in 2014 to 16th in 2015 — the largest single rate jump in the history of the Tax Foundation rankings.
Over the last decade, and until the pandemic hit — grinding our state’s economy ground to a halt — the results of these reforms were been record budget surpluses, higher personal incomes, and business growth and job creation that’s led the nation.
And, unlike other states — and because of these successful conservative reforms — we were well prepared to weather the financial storm caused by the widespread lockdowns and closures resulting from the pandemic. A recent Wall Street Journal article, “U.S. states face biggest cash crisis since the great Depression,” singled out North Carolina, with its large “rainy day” fund, as having “…some of the highest credit ratings in the nation and foster a mix of manufacturing, education, health care and business services…”
The North Carolina Chamber of Commerce, the leading business advocacy organization in North Carolina and an advocate for the conservative majority’s fiscal reforms, praised the news. “We applaud the many lawmakers who championed these reforms,” the Chamber said in a statement. “From reducing our personal income tax – a move that benefitted both families and small businesses taxed on their owners’ incomes – to implementing the lowest corporate tax rate in the country among states that levy one, job creators and growth-minded policymakers in our state have helped build one of the most attractive tax climates for new business investment.”