Daily Journal: Reagan, Goldwater, Friedman — and Carolina
In the following Daily Journal column, John Hood, President of the John Locke Foundation, reminds us that North Carolina’s Governor and General Assembly took important and historic steps this year towards advancing the type of tax, regulatory, and education policies advocated by conservative stalwarts like Ronald Reagan, Barry Goldwater, and Milton Friedman.
Reagan, Goldwater, Friedman — and Carolina
By John Hood
Nov. 18th, 2013
RALEIGH — Over the past three years, the North Carolina legislature has enacted Ronald Reagan’s favorite tax reform, Barry Goldwater’s favorite regulatory reform, and Milton Friedman’s favorite education reform. Yet some North Carolina conservatives of my acquaintance seem to think that the Republicans who lead the General Assembly have accomplished little.
It’s a strange, fascinating phenomenon.
As a consequence of my writing and broadcasting work, I frequently get invitations to speak to civic clubs, community groups, university classes, or other organizations around the state. During these appearances, I’ve been struck by just how wide the gap between public perception and political reality has become.
At one recent event, I explained the economic rationale for replacing the existing federal income tax code with a simpler, pro-growth Flat Tax of the kind that President Reagan and many of his economic advisors believed was the ultimate goal of tax reform. Afterwards, a local Republican activist came up, expressed his enthusiasm, and asked if I thought the North Carolina legislature would ever consider enacting such a tax plan.
Which is, of course, exactly what the legislature did in 2013 — a fact I had just finished explaining, obviously ineptly, to my audience. Starting in 2014, North Carolina will impose a single, flat-rate tax on a broader base of personal income. When fully implemented, tax reform will establish a flat rate of 5.75 percent, down from today’s income-tax rates of 6 percent, 7 percent, and 7.75 percent. The corporate income tax will also drop substantially. Before the tax reform, North Carolina imposed some of the highest marginal tax rates in the South. After tax reform, our marginal tax rates will be among the lowest.
While tax reform got the lion’s share of attention this year (but apparently not enough!) the North Carolina legislature continued to pursue other ideas popular with conservatives. For example, in each of the past three sessions, the General Assembly has enacted regulatory reform bills to contain or eliminate vague, costly, and counterproductive rules on business. Their handiwork would have thrilled longtime Arizona Sen. Barry Goldwater, who saw the growth of the regulatory state as an especially egregious problem. Read more…