How North Carolina’s Policies Put Corporate Power and Profits Over Community Needs
Across North Carolina, people want the economy to work for everyone. An economy for all means well-paying jobs that ensure we can support our families, and strong public services like schools, libraries, parks, and more that help everyone thrive. But too often, North Carolina’s state lawmakers have supported policies that benefit corporate profits and corporate power over regular people. Here are just a few of the ways that state policy choices have put corporations over communities in our state.
Lowering and eliminating the corporate income tax enriches out-of-state shareholders — while federal tax cuts already mean corporate income taxes are lower than ever
The biggest giveaway to large corporations is the plan to eliminate the corporate income tax in 2030, after steady cuts to the tax rate since 2013. When these companies no longer pay taxes on the profits they make in our state, North Carolina will have $1.5 billion less in public money, and this number will only grow.
Corporate income taxes are mostly passed on to wealthy shareholders and highly-paid executives who live outside North Carolina. More than 9 out of every 10 dollars from corporate tax cuts flow outside the state, while regular workers get little to no benefit. This tax is only paid by corporations organized under a specific legal structure, who generally operate in multiple states and are highly profitable, with profits over $25 million. Over 90 percent of employment growth in North Carolina comes from small businesses who generally don’t pay this tax, and research has found that cutting income taxes for corporations has little to no impact on the economic growth that benefits regular people.
North Carolina has continued on the path to zero corporate income tax at the same time federal tax cuts mean corporations are paying lower taxes than ever at the federal level. A new report from ITEP found that corporations paid the lowest effective federal income tax rate in 40 years of analysis in 2025, following two rounds of tax cuts under President Trump. They also received nearly $200 billion in tax subsidies, with the biggest subsidies going to large tech companies.
Corporations are also paying less taxes because of cuts to the franchise tax
The franchise tax is a state-level tax that businesses pay to operate in North Carolina. Having a franchise tax at all is one of the few progressive features of North Carolina’s state tax code, meaning it falls more heavily on wealthier residents. Legislators have made multiple changes to the state’s franchise tax in the past decade, and two significant cuts in recent years mean lower payments for big corporations, even as they’re also paying less in corporate income taxes.
The FY 2021-2023 biennial budget changed the policy for calculating the franchise tax base, which is the measure of a corporation’s economic activity that gets taxed. The policy change eliminated the state’s option to calculate the tax base using a corporation’s property values starting in tax year 2023. The change meant lower franchise taxes for corporations that own large amounts of property in the state, and reduced revenue by $173 million in the first full year it was implemented.
The FY 2023-2025 biennial budget made another cut specifically for C-Corporations, which are the types of corporations that pay the corporate income tax. This change capped the franchise tax at $500 for the first $1 million of the corporation’s tax base starting in tax year 2024. This meant a revenue loss of about $20 million in the first year of full implementation.
As a revenue source for the state General Fund, the franchise tax shrunk from almost 4 percent of total revenue in FY 2010 to just over 2 percent in FY 2024.
Anti-worker policies like the state’s “right-to-work” undermine worker power in favor or corporate profits
North Carolina’s “right-to-work” law also means more profits and power for corporations, by eroding the power of unions. Unions are organizations of workers who join together to improve their working conditions. They negotiate with their employers to create contracts that establish rules around wages, benefits, and other terms of employment. These contracts form the basis of how unionized workers have a say in their workplaces, balancing the power of shareholders and executives to set working conditions like breaks, wages, or access to healthcare and retirement benefits. They have to be approved by a vote of union members and are legally binding.
Union members pay dues to cover the costs involved in bargaining and enforcing their contracts, like legal and administrative support from union staff. So called “right-to-work” laws undermine union power by making it illegal to require all unionized workers covered by a contract to join the union and pay dues. This creates a free rider problem, where workers can get the benefits of being covered by a contract without contributing to the costs, and leaves unions with fewer resources to organize effectively.
Contrary to their misleading name, these laws don’t provide workers with any job protection or right to employment. Instead, they’re associated with lower wages for all workers, and “right-to-work” states tend to have lower union membership, weaker worker protections, and more anti-worker laws in general. North Carolina is no exception: it’s ranked as the worst state for workers when looking at policies around wages, worker protections, and organizing rights.
By weakening unions and lowering union representation, ‘right-to-work’ laws put more power and profits in the hands of corporate employers. Research has found that after their passage, wages for workers decrease but firms’ profits and executive compensation increase.
Sales and use tax exemptions give big handouts to corporate data centers
North Carolina gives businesses a variety of sales and property tax exemptions with the supposed goal of supporting economic development and job growth in the state. Among the exemptions that can have big benefits for large corporations are those for data centers. The companies behind many of the state’s existing and proposed data centers are huge, multinational technology corporations like Amazon, Microsoft, Google, and Meta. These are the same companies that have received the biggest corporate income tax subsidies at the federal level, with each getting between $13 and $19 billion in tax breaks in 2025.
While the state budget passed in July 2026 eliminated a sales tax exemption on electricity for data centers, it left three other costly subsidies intact. This includes a program that allows data centers to pay no sales and use taxes on support equipment used at their facilities. NC Commerce has estimated that this subsidy means NC is losing about $25 million in sales tax revenue annually, and that based on proposed new construction of data centers, this number could climb to about $250 million per year.
Tax amendments on the ballot would tilt policy even further in favor of corporations
If the two constitutional amendments limiting taxes are approved by voters in next week’s election, it will skew the state’s tax policy even more towards corporations. The first would limit the income tax rate for personal and corporate income taxes to 3.5 percent. The corporate income tax rate is already lower than this, and is set to be completely eliminated in 2030. Enshrining this cap in the constitution would prevent future lawmakers from passing better policies like the Kids Over Corporations Act, which would stop the elimination of the corporate income tax and instead raise the tax rate to 5%, putting it in line with neighboring states. Compared with current law, the Act could raise $2 billion for public priorities. But capping the income tax for corporations in the state constitution would prevent even this modest increase in the tax rate for corporations.
Another amendment would require the NC General Assembly to put limits on local revenue from property taxes, also known as a levy limit. While the amendment contains no details about the policy, it would give state lawmakers power to restrict local communities and limit the biggest source of funding for things like public school buildings, emergency services, and parks. Analysis from the NC Housing Coalition shows that if a 2% levy limit had been in place during the last property revaluation, homeowners would have received little benefit while big corporate property owners got windfall tax breaks. Statewide, the average homeowner would have saved $84, while Duke Energy would have saved $10 million. And as a local example, in Rutherford County the average homeowner would have saved $54, while a Meta data center would have saved over $1.2 million.
North Carolinians want state policymakers to support people’s well-being, not corporate profits
North Carolinians want legislators to focus on people-centered policies, not maximizing corporate profits and power. When asked in a recent poll about the most important thing for state legislators to prioritize, the top responses were improving the well-being of all North Carolinians at 32 percent, delivering quality schools, affordable health care, and good-paying jobs at 27 percent, and ensuring families can afford the basics and keep up with rising costs at 26 percent. Just 1 percent of respondents said lawmakers should focus on maintaining and growing profits and incomes for corporations and the wealthy.
We can come together to demand different policy choices from state lawmakers, that puts our well-being over corporations.
