|"Keep It Up, North Carolina Republicans!"
Republicans who run the NC General Assembly are following the same sober and mature approach toward spending North Carolinians’ tax money as our 30th president, Calvin Coolidge, did in Washington from 1923-1928.
We should be grateful.
North Carolina currently has
close to $4.13 billion in so-called “over-collections” coming into state
coffers which are surplus tax revenues expected due to stronger than expected
economic growth during the COVID pandemic. When the state budget was vetoed,
budgets reverted to prior year’s levels which contributed to the buildup of
unrestricted reserve funds as well.
When combined with over $1
billion in the “rainy day fund,” North Carolina is in far better economic and
fiscal health than many other states that have not been run as efficiently,
despite the economic dislocations caused by the COVID pandemic.
The formula for success in North
Carolina led by Republicans who have controlled the NCGA since 2011 closely
follows the blueprint laid out by President Coolidge, who was elevated to the
presidency when Warren G. Harding died of a heart attack. He followed his
flinty New England inclinations and implemented traditional Republican
principles that have been sadly forgotten in Washington and in big blue states
around the nation.
Coolidge’s formula for success
was simple: cut out wasteful and redundant spending first and then cut taxes
second, which no Republican has done in Washington since 2001. His parsimonious
approach to government is not even in the same planetary system as the
Biden/Socialist Democrat plan to exponentially increase spending, raise taxes
and debt at the same time, which is the biggest crapshoot America has ever seen
under any president, including President Obama.
Once Coolidge and Republicans
constrained government spending, the economy grew on its own accord due to the
tax cuts and generated more tax revenue than anticipated. Coolidge’s formula included
further budget-cutting each subsequent year which allowed more money to be
spent in the private sector which generated more economic growth and subsequent
surplus tax revenue to flow to Washington. Coolidge and the Republican Congress
passed annual tax cuts to continue the upward cycle of more tax revenue due to
economic growth, more budget-cutting and more tax cuts in each subsequent year.
Under Coolidge’s leadership, the
federal budget was in surplus every year from 1924 to 1928. The top income tax
rate was halved to 25%, and federal spending was cut more than 40%. Federal
debt was retired by over 30%. Unemployment for all Americans hit a record low
of 1.8% under Coolidge.
Since 2011, Republicans who have
controlled the North Carolina General Assembly have followed similar
traditional Republican policies. They established a flat income tax rate, now
down to 5.25%, on individuals, and slashed corporate income tax rates by close
to 70%, which resulted in over $2 billion staying with its rightful owners,
North Carolina taxpayers.
With increased economic growth,
they paid back $3 billion in unemployment insurance loans to the federal
government, which had been accumulated under former Gov. Beverly Perdue, in
less than two years. Over $1.4 billion in direct disaster relief assistance has
been paid out of the reserve funds directly to victims for losses sustained
from Hurricanes Florence and Dorian.
With over $4 billion in reserve,
the N.C. General Assembly could continue the lather, rinse, repeat budget reduction
and tax cuts cycle that President Coolidge enacted from 1924 to 1928 to bring
North Carolina rapid economic growth and prosperity for decades to come.
Republican leaders in the NCGA
should use this cushion in the reserve fund to continue to lower income tax
rates and eventually eliminate both personal and corporate income tax rates.
North Carolina would become an economic nuclear reactor for the 21st
century, as Texas and Florida are poised already to become as zero income tax
Treasury Secretary Janet Yellen
is calling for nations around the globe to raise corporate taxes to match the
higher rates President Biden wants to install and avoid “the race to the
bottom,” as she called lower rates.
Silent Cal would argue precisely
the opposite. North Carolina should continue to follow his lead.