State Tax Reform Essay Example | Topics and Well Written Essays - 1250 words - 17

state of matter Tax Reform - Essay ExampleInvestments in education and infrastructure have escalated. In response to the endlessly weak economic performance of North Carolina, a significant change to the tax system has been proposed. According to research conducted by Civitas Institute, chaired by Arthur Laffer, it is claimed that a reducing of tax rates for the wealthy and the elimination of corporate tax will revive North Carolinas economic performance and induce the creation of many job opportunities (Johnson, 2013). The Civitas/Laffer proposal would profoundly change North Carolinas tax framework by abateing the personal income tax, franchise tax and corporate tax, which in aggregate bring 65 percent of the states income, and to a great extent supplanting this income with a higher sales tax that would apply to more products and services. In particular, the proposal would first, abolish the personal income tax. Second, abolish the tax on corporate income (Johnson, 2013). Thir d, abolish the tax imposed on franchise business. Franchise businesses are businesses that benefit from already found brands and models by another organization. In California, the franchise tax is proposed to apply only to those franchise businesses incorporated within the State. The franchise tax is significant to the government since it is a source of revenue. The tax generates $ 650 million, thus the source of its significance. However, it is not as important as a corporate tax since the latter generates more revenue to the State government $ 1.1 billion. Personal tax is the most important since it generates the highest amount of revenue to the government - $ 10.3 billion based on the fiscal period 2011-2012 (Johnson, 2013).