But what can’t be argued about is that it will cost the average North Carolina household making $45,210 a year about $2,100 more in taxes if the Bush tax cuts expire. Here is a simple, easy to use calculator to find out what it will cost you. On the flip side, if North Carolina eliminates its state income tax, the average North Carolina household will save $2,100 a year. You do the math.

Find out more about how to get rid of the state income tax at www.noincometaxnc.org, and while you’re waiting to get pushed off the fiscal cliff, here is a list of random things to do with $2,100:

• buy a used car for your teenager
• go on a cruise with your spouse for your anniversary
• visit Europe
• save for college or graduate school
• treat your pet for a broken leg or cancer
• file a patent with the Patent Office
• build a doomsday bunker

Sadly, not even the A-grade governors came close to receiving a score of 100. The highest ranked state executives were Kansas Governor Sam Brownback and Florida Governor Rick Scott, both Republicans with scores of 69. In other words, Cato’s ranking puts Perdue in the middle of a pack of already sub-par governors.

As Civitas has reported time and again, Perdue’s crony policies, income tax hikes on the middle-class, and failures to help small business were all factors in her score. With an unemployment rate of 9.7 percent, putting us at 47^th in the nation, North Carolina needs better than average fiscal policies. Be sure to read Cato’s commentary on Perdue below and find out more from Civitas on how to fix the tax code and budget in NC.

Early in her tenure, Governor Perdue signed a giant package of tax increases that raised $1 billion annually. Middle-income households were hit with a 2 percent surtax on their incomes, and higher earners and corporations were hit with a 3 percent surtax. In addition, the state sales tax rate was raised by one percentage point, bringing the typical state-local rate in North Carolina to 7.75 percent. Perdue also broadened the sales tax base, increased cigarette taxes, imposed a new hospital tax, and hiked taxes on beer, wine, and liquor.

Perdue promised that the sales tax increase would be temporary, but in 2011 she changed her mind and proposed extending most of it. However, since the hike was put in place the legislature has flipped to Republican control and it has blocked extension of the sales tax increase.

Purdue seems undecided on the issue of business taxes. She opposed a major tax cut for small businesses last year, which passed over her veto. However, she proposed cutting the corporate income tax rate from 6.9 to 4.9 percent, but that pro-growth reform has not yet passed.

There are always growing pains when trying to cut needless spending and redirect scarce resources towards more effective ends. But if the mechanics shops can invest in diversifying their services, free enterprise in the realm of automotive care will flourish. Shops will be forced to compete for customers, rather than rely on business that is artificially guarunteed by current regulation, and North Carolinians will have a few more bucks to save towards getting that new fuel-efficient car they want.

The bill would provide a 7% tax credit on investments in small businesses after three years and an 8% tax credit each year for four additional years. In other words, the money has to be invested for a minimum of seven years for investors to receive the full amount of the tax credit, which cannot exceed $2 million per investor. Supporters of the bill call it a good plan because the state would only be giving $40 million of tax credit for every $500 million invested. What’s another $40 million anyway?

The bill, which was approved and will now be sent to the Finance Committee, was criticized in the meeting by Rep. Mike Stone (R-Harnet, Lee), who expressed concerns that the tax breaks would encourage bad investments. Rep. Stone also asked about the bankruptcy of a Chicago business, Protein Solutions, a meat-packing company that went bankrupt after receiveing tax credits from an Illinois statute identical to the one being proposed here.

Rep. Murry, along with an “expert” who spoke about the bills adopted in other states, directly addressed the concern over Protein Solutions. The argument in favor of the bill hinged on the idea that Protein Solutions’ plight was the result of the ongoing recession, not the fault of the tax credit plan. He also noted that the government was able to recollect the tax money and put it towards other business’s equity investments (which might also fail).

If you didn’t know any better you might think from these arguments the recession just magically happened and that there was nothing that could have been done to prevent it.  You might even think that such businesses as Protein Solutions fail,  not because they are bad businesses or because the market does not provide the demand for their product, but because they have no control over such economic hardships. This argument fails to realize, however, that the recession happened for a reason. It happened because of government policies exactly the same as the one supported by Rep. Murry and approved today by the House committee.

The housing bubble was caused by artificially low interest rates on loans, set by the Federal Reserve. Banks were encouraged to give loans to people who could not pay them back. A lot of people were able to live in nice homes who otherwise would never have gotten loans to purchase them and many of those homes were eventually foreclosed. HB 1149 would create an identical situation. The bill would allow investors to artificially lower the interest rates on high risk loans because government money (your money) would be insuring these reckless business ventures.

Many bad businesses would be supported, businesses that would fail in the free-market, while the owners of good businesses would get no benefit from such a program. In fact, their tax dollars would be going to support it. Many people think that it is unfair when small businesses have to close. It is more unfair when good businesses are forced to support bad ones. As Rep. Stone commented, when the government starts picking winners and losers, it “does a lousy job”.

A recent article posted on the Civitas Institute noted an increase in spending and hiring within the education budget.

Perdue was quoted in the press release:

“I want to let you know that when I present my budget this spring, I will once again call on the Republican-controlled General Assembly to temporarily restore three-quarters of the one-cent sales tax as a vital step to funding our schools.”

Perdue’s promised tax increase mirrors the same pledge made by Rep. Bill Faison (D-Orange) who appears to be setting himself up for a primary challenge to Perdue. He also called for increasing the sales tax.

Senate President Pro Tem Phil Berger (R-Rockingham) pointed that out in a press release reacting to Perdue’s pledge.

“Obviously, Gov. Perdue’s attempt to nip this economic recovery in the bud is dead on arrival at the General Assembly,” said Senate President Pro Tempore Phil Berger (R-Rockingham). “The Democratic primary for governor apparently has devolved into a fight over who can raise the most taxes, spend the most money, and grow the biggest government. Gov. Perdue’s latest tax-hike stunt proves she can’t fix this mess she made.”

Berger said The Governor seemed to be wanting to one up Faison. Sen. Berger noted while Faison would raise the tax by $700 million, Perdue’s proposal would up it by $750 million.

Update:

House Speaker Thom Tillis (R-Mecklenburg) issued the following statement today regarding Gov. Bev Perdue’s proposal to raise $750 million in new taxes:

“Governor Perdue continues to show that she is out of touch with North Carolinians and lacks a basic understanding of our economy.  Her proposal, which would raise the state portion of the sales tax by an estimated 15%, would make it harder for working families to purchase prepared food, clothing, medical supplies and other basic necessities to support an extreme agenda for larger government.  That is completely unacceptable.  This regressive tax would make it more expensive for single moms to buy carryout food for their children, force seniors to pay more for medical supplies, and would negatively impact every level of society.  Now is not the time to raise taxes, especially in light of the fact that the General Assembly’s education budget was only 0.5% different than the Governor’s – and we did not raise taxes.”