This ought to be no surprise coming from The Washington Post:
For a peek into a world after a massive tax cut, visit North Carolina and ride along with factory owner Eric Henry.
Conservative groups have hailed North Carolina as a model of a tax overhaul since it began slashing state corporate and individual tax rates four years ago. And one of the effort’s main architects, Thom Tillis, is now in the U.S. Senate, where early Saturday he joined 50 other Republican senators in voting for a $1.5?trillion federal tax overhaul — a plan that employs many of the same tactics already in use here.
But as Henry drove through the conservative, rural county he’s called home all his life, he had trouble seeing many benefits of the tax cut. Business was good, but it wasn’t good enough that he could give his 20 workers significant raises. […]
Tillis and the drivebys love to give Tillis credit for tax cuts and North Carolina’s success. They want us to forget that Tillis watered down tax cut proposals from more conservative members of the House caucus. He also went on record that he was all for opposing tax increases — if they were pushed by Democrats. He only went along with the end result because: (1) his caucus overwhelmingly supported the concept, and (2) he wanted to win a crowded GOP primary for US Senate.
[…] And there were growing worries that the lost tax revenue — estimated at $3.5?billion this year alone — was beginning to significantly hurt core public services such as schools. […]
Um, WHO was worried about that? North Carolina has been repeatedly posting budget surpluses. That means you take in more money than you need to pay the bills. Government is not a for-profit enterprise. If they take too much money from the people, they need to return it.
[…] Instead, North Carolina has enjoyed the same steady growth as much of the country, making it challenging to estimate the impact of the tax cut compared with the many other factors shaping the state’s economy.
“There’s nothing magical that has happened in North Carolina,” said John Quinterno, an economic analyst at the Chapel Hill-based research group South by North Strategies.
Henry, 60, runs a T-shirt manufacturer called TS Designs, which sources all its material locally. His company almost went belly up in the mid-1990s when free-trade pacts such as the North American Free Trade Agreement opened the borders to cheap foreign textiles. Henry knew he couldn’t compete on price. So he rebuilt his business around selling a higher-quality, locally made product instead. […]
For those of you keeping score, Quinterno used to work for the same outfit that employs Rob Schofield and Chris Fitzsimon. South by North still has a lefty flavor to it. And the prefix “Chapel Hill-based” ought to set off alarm bells and raise many red flags for those seeking fairness toward conservatism and the free market.
[…] But even if the top-line numbers have improved, workers have not seen huge benefits. The median hourly wage in North Carolina grew roughly on par with the national rate, while the average hourly wage and annual wage grew notably slower, according the federal Bureau of Labor Statistics.
Henry said he supports policies that make running a business easier. He’s fiscally conservative, and he considered himself a Republican until he switched parties in recent years when the state GOP party increasingly took stances on social issues — pushing a same-sex marriage ban and the so-called transgender bathroom bill — that he disagreed with.
As Henry drove, he called other people he knew. One of them, a local architect named John Plageman, said he’d seen a spike in new business this year.
“I’d assume it has something to do with the tax cuts,” Plageman said.
And he was excited by the prospect of federal tax cuts.
Eating lunch at Reverence Farms Café in nearby Graham, Henry sat with Bruce Nelson, who runs the cafe and a local farm with his daughter and son-in-law. In a different life, Nelson was chief executive of Office Depot. He said he understood why Wall Street was so excited about tax reform.
But Nelson said he doubted the cuts would generate significant corporate investment. Companies already need to be ruthless about lowering costs. He couldn’t imagine a company waiting for a tax cut to become more efficient. And he didn’t expect the tax cuts to translate into pay raises.
“There’s no such thing as trickle-down,” Nelson said.[…]
Sure, if you’re looking at Office Depot, instead of a local small business — where all the growth and action is. With a track record of running Office Depot, I don’t think I’d be seeking business advice / analysis from this Nelson guy.
No trickle-down? Letting people keep more of their own money doesn’t have any collateral effects in the surrounding community?
Oh, and trying to paint Henry as an angry conservative is ludicrous. Go to his web site. He’s a big ol’ sustainability-loving radical environmentalist. He’s apparently a big fan of big solar — which depends on lots and lots of tax revenue to survive.
[…] While North Carolina’s economy has chugged along, signs of strain on state spending have increased. The state budget has not kept pace with a growing population, said Alexandra Sirota, director of the North Carolina Budget and Tax Center, a left-leaning nonprofit.
“Pretty soon, we’re not going to have enough money,” Sirota said.
Again, a minion of Chris and Rob.
The state legislature’s Fiscal Research Division agrees. It projects budget shortfalls of at least $1.2?billion starting in 2019.
And legislators have delayed income tax cuts until 2019, in order to see how that plays out.
In North Carolina, the state government provides the bulk of public education funding. And while the overall contribution is up, per-pupil spending, adjusted for inflation, is down. Plus, there are about 10,000 fewer public school teachers in the state, despite growing enrollment, said Mark Jewell of the North Carolina Association of Educators.
The school system serving Burlington is struggling, said Alamance-Burlington Schools superintendent Bill Harrison.
Anyone claiming schools are better off after the tax cuts is “using smoke and mirrors,” Harrison said.
Harrison rattled off a string of numbers to make his point. Funding for school supplies has dropped 20?percent, he said. His schools get 33?percent less money for textbooks now than a decade ago.
“I heard it every year: Why doesn’t my child have a textbook?” Harrison said.
This is coming from the HIGHEST-PAID school superintendent in the state. He was also installed by Gov. Bev Perdue as schools CEO — as part of her spat with then -DPI superintendent June Atkinson.
[…] Henry’s wife, Lisa, taught preschool for children with disabilities for almost three decades. She retired in 2015 after watching several years in which state lawmakers made cuts to public schools, including by underfunding teacher pay raises.
“It just felt like a huge slap in the face,” Lisa Henry said.[…]
Teacher pay raises / supplements are handled by local officials in each county. Talk to your school board and county commissioners.
As the sun started to set, Henry drove back to his company. Just a few employees were still around. None of them said they’d noticed the state tax cuts.
“Other than the roads not getting taken care of,” said Eric Michel, 33, chief logistics officer.
And no one in the office has gotten a big pay raise since the tax cut, either.[…]
I’m not filthy rich. And I paid more to the state than I have in the past. Politicians have treated tax reform like too much of a shell game. Cut this tax for this group here, but then approve the introduction of these off-setting “fees.”
Real conservative economic policy involves cutting spending AND taxes. We only manage to get half of that equation from our elected Republicans. They’re on the right track in Raleigh. But we’re nowhere near conservative revolution territory.