Remember all those very serious explanations from Gov. Pat McCrory and the radical Raleigh Republicans regarding how their massive tax shifts and tax cuts were intended to make taxes fairer and flatter and to broaden the tax base.
Part of the deal, such as it was, was that in exchange for lower and flatten marginal personal income tax rates that would provide an enormous windfall for the wealthy, the state would also eliminate and cap a few tax loopholes.
Oh sure, those changes had the effect of erasing hundreds of millions of dollars of tax liabilities for the Governor's wealthy contributors and raising taxes on the poor and elderly, but hey, you have to break a few modest nest eggs to make a fairer, flatter, and broader tax omelet.
How long did Gov. McCrory's fidelity to fairer, flatter, and broader taxes last? Less than a year.
One of set of tax credits that was going to expire was the personal income tax credits on rehabilitating historic buildings and mills. The NC Department of Revenue estimates that the credits, which largely go to the wealthiest tax filers, depleted state coffers to the tune of $34 million in FY 2012 and will cost about $25 million per year in the next two years before their scheduled expiration.
Gov. McCrory announced yesterday that he wants to replace those expiring tax breaks with new ones.
Besides being a give-away to the rich (currently you need to pony up at least $3 million in repairs to claim the mill rehabilitation credit), the breaks re-introduce complications into the tax code and reduce state revenues.
To be fair, the credits have some worthwhile features. However, the Governor's rote response when asked about other worthy expenditures, like the Earned Income Tax Credit for the poor or raises for teachers and state employees, is that the state can't afford them.
Similarly, there don't appear to be any plans to repeal the new tax hikes the Governor and Republicans imposed on trailer homes and modular homes. Historic homes owned by the rich get some nice tax candy; modest shelters for struggling, working families, not so much.
As this latest episode shows, fairness was never really part of the Governor's tax plans. However, his fidelity to tax cuts for the rich at the explicit expense of the poor remains intact.
