North Carolina Governor Pat McCrory shows a strong commitment to tax reform. From the bill he signed in 2013 – which transformed the state’s income tax from a multi-rate mess to a logical flat-rate tax, among other pro-growth changes – to his current leadership as the North Carolina legislature hammers out budget details, McCrory brings a disciplined approach to improving his state’s economy.

As the House and Senate determine the particulars of the new state budget, some disagreements have arisen. Certainly, the conservatives leading both chambers agree that reform is necessary; they want to see lower taxes and reduced government spending. Yet they are divided when it comes to approach. There are basically three factions: the “Fair Taxers,” the “Flat Taxers,” and the “Balanced Taxers.” The Fair Taxers would like to eliminate North Carolina’s state income tax entirely, and introduce a broad-based sales tax on retail goods and services. The Flat Taxers wish to keep the single marginal rate, as well as properly redefine the tax base in order to prevent the double-taxation of investment income. The Balanced Taxers find the strategies of the Fair Taxers and Flat Taxers too bold, and instead advocate for a diverse portfolio of state revenue sources.

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