The Republican Party of North Carolina The Republican Party of North Carolina

Tax Reform Transformed North Carolina. Congress, Take Note
By Thom Tillis
The Wall Street Journal

"As President Trump and Congress work on America’s first major tax reform in decades, Democrats are already claiming the GOP plan will bury the middle class and tank the economy. These are old talking points, and false. To get a sense of what a successful tax reform can do, look no further than my state, North Carolina.

"In 2013, when I was speaker of the state House, North Carolina passed a serious tax-reform package. It was based on three simple principles: simplify the tax code, lower rates, and broaden the base.

"The results over the past four years have been impressive by any standard. The Tar Heel State has gone from having the least competitive tax code in the region to having one of the most competitive in the nation, according to the nonpartisan Tax Foundation. More than 350,000 jobs have been created, and the unemployment rate has been cut nearly in half. The state’s economy has jumped from one of the slowest growing in the country to one of the fastest growing. Survey after survey cites North Carolina as one of the best states in which to run a business.

"Meanwhile, a well-mobilized opposition on the left stoked fears that tax reform would cause shrinking state revenues and require massive budget cuts. This argument has been proved wrong. State revenue has increased each year since tax reform was enacted, and budget surpluses of more than $400 million are the new norm. North Carolina lawmakers have wisely used these surpluses to cut tax rates even further for families and businesses, to increase education funding, to raise teacher pay, and to replenish the state’s rainy-day fund.

"In the end, the political disagreements, tense negotiations, and pleading from special interests were only bumps in the road. North Carolina is proof positive that successfully enacting tax reform reaps tremendous rewards: more growth, more jobs, more businesses and more revenue.

"Republicans in Congress want tax reform to do the same for all of America, but they face a similar set of challenges. Policy differences must be worked out between GOP lawmakers, which will require a commitment to discipline and consensus-building that is sometimes lost on a small minority of our party. An army of lobbyists on K Street will descend upon Capitol Hill like a horde of zombies, seeking special carve-outs. Democrats, led by the dynamic duo of “Chuck” and “Nancy,” are voicing new concern about federal spending while demanding revenue neutrality—a hypocritical change of tune after they ran up historic deficits the last time they were in power.

"Yet I know Washington can succeed in this effort. North Carolina has shown that although tax reform may be difficult, it isn’t all that complicated. The American people have been waiting for a better tax code for decades, and virtually every Republican officeholder in Washington was elected with a promise to enact one. Tax reform would help spur job creation and cement American competitiveness in the 21st-century global economy. Congress has every reason to get it done—and no excuses not to.

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