The Youngkin dividend
Even though the 2021 election season is long over, there’s still fallout from the GOP win in Virginia. One place reaping the benefits: North Carolina, where Democratic Gov. Roy Cooper is not going to stand in the way of the GOP legislature’s effort to reduce and repeal state taxes:
The deal phases out the state’s 2.5% corporate income tax between 2025 and 2031. When fully repealed, that will amount to at least $900 million in annual tax savings. The deal also cuts the state’s flat 5.25% personal income tax rate in stages to 3.99% by July 1, 2027. The deal raises the standard deduction to $25,500 for joint filers and $12,750 for single payers, among other tax tweaks. North Carolina ranks tenth on the Tax Foundation’s 2021 state business tax climate index, and these reforms will make it even more competitive.
And it’s about to get even more competitive, which helps explain why North Carolina gained an additional U.S. House district in the recent census. Politics can work, for everyone’s benefit. It just takes a bit of compromise…something desperately lacking in DC:
The North Carolina budget is an example of bipartisan compromise that would be possible in Washington if President Biden tried to govern as he campaigned instead of bowing to the left at every turn. But the GOP victories in Virginia and beyond are already paying dividends around the country.
It appears so. And while the usual words of caution are necessary – don’t get cocky – the prospects for a more constructive political climate are there.