If Democrats in Illinois’ General Assembly are looking for a progressive tax, they can have North Carolina’s since they aren’t using it anymore.
The Tar Heel State did away with its multi-level income tax in 2014 and moved to a flat tax for all taxpayers. John Locke Foundation Vice President Roy Cordato said his state ended the progressive tax because it punished achievement.
“The income tax was penalizing work effort, investment savings, entrepreneurship and something needed to be done about it,” he said.
Click here for summary
The state’s old system had two levels based on income. But hard times hit their economy and they added two new upper tiers for high-wage earners. Cordato says the constitutional flat tax Illinois has would keep that from happening.
“Any given tax change is only as good as the current legislature, at least, without it (being) constitutional,” Cordato said.
Cordato said the flat income tax makes it harder for politicians to justify tax hikes compared to a progressive system.
“You can convince everyone that we’re going to pay for this increase in education spending or whatever by simply taxing the wealthy,” he said.
Opponents of the flat tax in North Carolina say it gave tax breaks to wealthy corporations and cut funding for government services.