The N.C. Justice Center says that tax increases approved by the legislature this year are likely to prevent job losses in the private and public sectors.
The Center issued a release on a new report that contends that the popular notion that tax increases will lead to job losses is not true.
The report says that without the tax increases, deeper cuts would have been made in state services such as education.
"Those cuts certainly would have caused job losses in both the private and public sectors, while credible research concludes the revenue increases likely will not negatively impact the job market," reads the report.
The report says that North Carolina's tax increases are equal to a small fraction of the state's economy and do not put North Carolina out of line with taxes in other states. As a result, the report says, the tax increases should not put North Carolina at a competitive disadvantage with other states when it comes to jobs.
Finally, the report says that a comparable set of tax increases by North Carolina in 2001 did not have a negative impact on the state's economy.
The report concluded:
Taking a balanced approach to addressing the budget shortfall allowed the state to avoid major setbacks in public programs and avoid laying off tens of thousands of state workers, which would have had negative effects on the state economy.
Update: Well, it didn't take long for the other side to chime in. The folks at the Civitas Institute have posted a response to what they call a "bizarro-world 'analysis."
The Civitas post says the Justice Center report "does nothing to bolster its claim that higher taxes have no effect on job growth. Any basic Econ 101 theory will describe how job and economic growth is based largely upon the accumulation and investment of new capital and the proper incentive structure."
The post says that increasing taxes reduces the amount of capital available for invements and "destroys the incentives for entrepreneurs to engage in productive investment."




Re: Report: Tax hikes don't mean job losses
Mr. Jackson -
First of all, your bio is on ncjustice.org - looks like you have a MA (masters in what?) from the School of Journalism at UNC-CH, & a PhD (in what?) from the Dept. of Gvt at Cornell. And you've done consultant work for labor unions & performed collective bargaining studies. Why not share with us the subject of your degrees?
Secondly, your 2-page brief cites 2003 research from Arizona St. Univ., stats from the IRS & Census Bureau, & research from the NEA - well of course the NEA will be pro-tax. Would you cite research from the NC Pork Producers Assoc'n to push an agenda to eat more pork? No, didn't think so.
I'm confused - in your comments you refer to Nobel prize winners & the head of the OMB. I don't see any such references in the brief. I must be missing something - please clarify. Thank you.