North Carolina tax reformers just getting started

North Carolina is gearing up for another reform effort to enhance the state’s competitiveness. This year, political leaders overhauled North Carolina’s tax environment. Beginning in 2014, the state’s progressive income tax will be replaced with a lower, more competitive flat rate income tax. And the new flat rates are scheduled to decrease even more over the...

North Carolina is gearing up for another reform effort to enhance the state’s competitiveness. This year, political leaders overhauled North Carolina’s tax environment. Beginning in 2014, the state’s progressive income tax will be replaced with a lower, more competitive flat rate income tax. And the new flat rates are scheduled to decrease even more over the next few years.

North Carolina’s bold leadership and comprehensive tax reform could move the state up to 17th from 44th in the Tax Foundation’s State Business Tax Climate index.

And North Carolina tax reformers aren’t stopping there. Now the plan is to eliminate the income tax all together:

State Sen. Bob Rucho, a Mecklenburg County Republican and chairman of the Senate Finance Committee, said Wednesday that he hoped to use the 2015 legislative session to eliminate the state income tax. … “We want to get away from that and go to a more flat consumption-based tax on sales taxes, both goods and services, and in return, we’ll say, ‘We’ll go to zero with the income tax.’ And that’s something we think we can achieve. It just takes time to get there,” he said.

These bold reform plans show that tinkering at the margin isn’t enough to pull ahead in today’s competitive economy. States need to enact bold, comprehensive reforms to get ahead. And that’s exactly what North Carolina is doing.

North Carolina’s tax reform plans are a breath of fresh air for those of us in Illinois – a state nearing insolvency with politicians looking to push taxes even higher. Illinois should take special note that North Carolina is planning to eliminate its income tax altogether to achieve financial prosperity, not the other way around.