Tax Cuts Necessary to Heal Economy, Locke Official Says

An official with the John Locke Foundation said yesterday that North Carolina legislators should cut taxes to increase economic growth, and the state should have a constitutional amendment linking spending increases to inflation and population growth.

“We are consistently above our neighbors in taxes,” said Roy Cordato, a resident scholar and vice president for research at the foundation, based in Raleigh.

Cordato spoke before a small group at a luncheon at Sagebrush Steak House & Saloon in Winston-Salem that was co-sponsored by the Forsyth County chapter of the N.C. Citizens for a Sound Economy, an anti-tax activist group. “The income tax is a tax on growth,” he said. He also called the state tax on corporations “a reprehensible tax.”

The tax rates have hurt the economy, Cordato said, citing the fact that North Carolina’s unemployment rate was below the national rate until 2001. “I’m going to argue a lot of it has to do with our tax policy.”

The state implemented a temporary tax increase a couple of years ago that is set to expire this year, he said. However, Gov. Mike Easley wants the taxes, which are primarily sales and income taxes, to be extended for two years to help deal with the state’s budget problems. The state budget deficit is estimated to be as much as $2 billion for the coming budget year.

“Let these taxes sunset,” Cordato said.

Cordato said that government should always be concerned with allowing people to keep as much of their money as possible. He recited a line from the state constitution that says that one of the rights of citizens is “the enjoyment of the fruits of their own labor;” in other words, their income.

“Taxation is inherently a violation of that right,” he said.

Cordato also espoused the foundation’s call for an amendment to the state constitution that would hold state spending increases to inflation increases and population growth.

Cordato said that if the state had that measure in place a few years ago, it wouldn’t be facing the budget deficit that it now does.

Cordato also criticized state incentives and subsidies to corporations. “It’s simply socialism,” he said.

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