(The Center Square) – Most North Carolinians who responded to a recent poll oppose eliminating the corporate tax.
State Innovation Exchange, a strategy center at the University of Wisconsin–Madison, conducted a survey of 1,113 registered voters from July 6 to July 11. The survey results showed 66% of respondents oppose completely eliminating the state's corporate income tax.
The North Carolina General Assembly is considering two pieces of legislation that would end corporate taxes for businesses over five years.
The Senate voted, 36-14, last month to approve House Bill 334. It gradually reduces the corporate income tax over five years, starting in 2024. The Senate also included the provision in its budget proposal for the biennium. The proposals must now be considered by the House.
The state’s corporate tax rate is 2.5% of a business’ net income. If the policy changes, North Carolina would be the seventh state without a corporate income tax.
When respondents were told the proposal would cost the state $5 billion a year in tax revenue, 68% of respondents said they disapproved of the plan.
Respondents were mostly women (53%) and over age 50. The respondents spread across party lines with 37% identifying as Democrats, 34% Republicans and 28% Independents, but leaning either way. Thirty-seven percent of respondents said they considered themselves conservative, and 35% said they considered themselves moderate.
Most Democrats (74%) said they opposed ending the corporate tax in North Carolina. Republicans and Independents were around the same, with 59% and 58%, respectively, opposing the concept.
About 44% of respondents lived in rural North Carolina, and 25% were Black residents.
Survey results showed 63% of rural voters oppose ending corporate tax, and 62% of Black voters also disapproved of the proposal. When the revenue loss was mentioned, 70% of Black voters said they disapproved.
Voters also were asked whether American Rescue Plan Act money should be used to make new investments in North Carolina families and businesses or to pay for existing obligations in the state budget, including elimination of corporate taxes.
Most of the respondents (58%) said the state should use the federal aid on new investments.
Black voters overwhelmingly favored the spending approach. Results showed 76% of Black voters think the money should be used for new investments. Rural voters were more aligned with the overall opinion with 59% of rural voters selecting new investments as a priority.
Fourteen percent of voters said the state should focus on using the federal money for new investments, existing obligations and corporate tax cuts. Another 12% said they favored using it for existing obligations and corporate tax cuts.
Results showed 88% of voters think North Carolina should use ARPA funding for workforce support, training and education. Another 86% think lawmakers should invest in grants for small businesses in communities hard hit by the pandemic. Only 27% said lawmakers should use the aid specifically to cover corporate tax elimination.
The poll's margin of error was 3.5%. Of the 1,113 responses, 800 were weighted to adjust the data to try and ensure the sample reflected the characteristics of the state's population.