CLC Reports

    Study: Phasing out the Franchise Tax

    North Carolina is one of only 16 states which impose a franchise tax. What is a franchise tax? It is a tax on business investment and wealth accumulation for S and C corporations. Several businesses are not subject to the tax, having escaped liability thanks to special carve-outs. The ones who pay the franchise tax are essentially taxed twice, paying in addition to the corporate tax rate.

    The General Assembly is considering a reduction in the franchise tax rate, as well as a complete repeal. We contracted with the nonpartisan Beacon Hill Institute to determine the economic effects of both proposals.

    Their modeling program shows that SB 622, which reduces the franchise tax rate, would create private sector jobs, increase real disposable income, improve business investment, and increase the state’s real gross domestic product. All the while, the franchise tax reduction would minimally affect the state’s bottom line.

    Read the full Beacon Hill study here.

    Medicaid: A Prescription for Disaster

    After winning re-election last week by nearly a quarter of a million votes, Governor Roy Cooper signaled his intention to continue pursuing expansion of North Carolina’s Medicaid program, despite conservatives maintaining their majority in the state Senate and strengthening their majority in the state House. Conservative legislators in the General Assembly have historically opposed expanding Medicaid.

    There are approximately 2 million people currently enrolled Medicaid in North Carolina, roughly 20 percent of everyone in the state.

    What is Medicaid?

    Medicaid is the single largest source of health coverage in the nation. Started in 1965, it is a federal program, administered by each state government, that’s designed to provide health insurance and health services to our most vulnerable citizens: low-income families with children and others who find themselves in an eligible category, including pregnant women, senior citizens, the blind, and individuals with other disabilities. While these categories vary by state, generally speaking, eligibility for Medicaid (with some exceptions) relies on a household’s income and how it compares to the federal poverty level.

    Read our full analysis here.