Swing District Democrat Attempts To Claim Moderate Mantle, Is Undermined By Voting Record

“In this race, I’m the moderate by far,” Wiley Nickel proclaimed during an October 1 interview with WRAL News. This assertion of moderation comes as Nickel, a former Obama administration staffer and current state senator, seeks to win over independent voters as the Democratic nominee in North Carolina’s 13th congressional district. Yet those most familiar with Nickel’s work in the North Carolina General Assembly, including members of the press who have followed Nickel’s voting record closely, find his moderate branding to be a stretch.

“You’re campaigning as a moderate, I’ve covered you in the state legislature for a long time and you’ve often voted to the left of your caucus,” veteran North Carolina statehouse reporter Laura Leslie recently said during an interview with Nickel, before going on to ask, “why should voters believe you?”

Leslie has a point. Senator Nickel, for a recent example, refused to support the compromise budget Governor Roy Cooper (D) enacted last year, which was approved with a bipartisan vote in the North Carolina House and Senate. Though nearly all of his fellow Democrats in the state legislature voted for that budget, which provided another round of personal and corporate income tax relief, Wiley Nickel was one of only seven state senators to vote against it.

In signing that bipartisan budget on November 18, 2021, Governor Cooper scheduled North Carolina’s personal income tax rate to drop from 5.25% to 4.99% in 2022 and continue with annual drawdowns until the rate hits 3.99% by the end of 2026. This bipartisan budget will provide billions of dollars in relief to millions of taxpayers across the state, including hundreds of thousands of small businesses that file under the personal income tax system. In addition to another round of personal income tax relief, the new budget enacted by Cooper and the GOP-led General Assembly phases out the corporate income tax entirely by 2030.

At 2.5%, North Carolina’s current corporate income tax rate is the lowest in the country among the majority of states that impose such a tax. Over the objections of Wiley Nickel, who now postures as a moderate, Governor Cooper and the Republican-led General Assembly, with the support of most Democratic legislators, increased the job-creating and sustaining capacity of North Carolina-based employers.

“Businesses are going to want to now come to North Carolina even more so than they did before,” said Nathan Goldman, assistant professor of accounting at North Carolina State University’s Poole College of Management, of the corporate tax phaseout included in the budget.

In announcing his opposition to the bipartisan budget, Nickel made clear he would rather state government spend additional taxpayer dollars than see families and employers to keep a greater share of their earnings. “North Carolina already has the lowest corporate income taxes in the South but has failed to invest in our teachers and our public schools,” Nickel said in a statement announcing his opposition to the bipartisan budget. “Corporations need to pay their fair share so we can invest in a world-class public education system.”

While a reporter pointed out to Nickel that he’s often to the left of many of his General Assembly colleagues, Nickel’s opposition to corporate tax relief also puts him to the left of former colleagues in the Obama administration. While in office, President Barack Obama called for a corporate tax rate reduction and during his tenure key non-partisan scorekeepers adjusted their methodology to account for the fact that much of the burden of corporate taxation is borne not merely by shareholders, but also by workers and consumers.

“When effective marginal rates are higher, potential projects need to generate more income if the business is to pay the tax and still provide investors with the required return,” stated the Economic Report of the President that the Obama administration transmitted to Congress in February 20215. “Thus, all else equal, a higher effective marginal rate for businesses will tend to reduce the level of investment, and a lower effective marginal rate will tend to encourage additional projects and a larger capital stock. Increases in the capital available for each worker’s use, also referred to as capital deepening, boost productivity, wages, and output.”

The non-partisan Join Committee on Taxation’s recent analysis of the Inflation Relief Act received a great deal of attention because it showed how the corporate tax hike included in the IRA would translate into a higher federal tax burden for low- and middle-income households. This accounting for the instance of corporate taxation and the share borne by low- and middle-income taxpayers is the result of JCT methodology changes implemented during the Obama administration.

A bipartisan consensus has emerged over the past decade in which there is agreement across the political and ideological spectrum that corporate taxes are paid, to some extent, by workers in the form of lower wages and consumers in the form of higher prices. The debate is no longer about whether corporate taxes are paid by people, but over the degree to which the burden of corporate taxation is not exclusively paid by shareholders. Wiley Nickel, who was elected to the North Carolina Senate 12 years after unsuccessfully running for the California Senate, speaks as though he’s unaware this evolution has occurred.

“While the state of North Carolina collects significant taxes from corporate income taxes, it is important to point out that in 2020, this only equated to a little under $1.5 billion, which is less than 5% of total state income tax collections,” Professor Goldman noted about the state’s reliance on corporate tax revenue. “In fact, it is the tax on individual income that raises over half of all tax collections in North Carolina. Consequently, if North Carolina continues to bring in new businesses and their employees due to the state’s favorable business tax environment, then the lost tax collections from a 0% corporate income tax rate may be dwarfed by the increase in tax revenues from a greater number of individuals who are paying individual income taxes.”

Nickel’s opposition to the tax relief included in last year’s bipartisan budget underscores why his claims of moderation ring so hollow with those who best know his voting record. Nickel’s record and rhetoric also highlights how far to the left many politicians in the Democratic Party have drifted over the years.

“The right kind of tax cut at the right time is the most effective measure that this Government could take to spur our economy forward,” President John F. Kennedy said during a 1962 speech. During his annual budget address to Congress in 1963, President Kennedy sounded very different from Nickel and other present day Democrats, advising that “lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

Bill Clinton eventually governed like a moderate Democrat. JFK was a moderate, arguably even conservative Democrat. Moderate Democrats still exist, though they’re not as prevalent in Congress and state legislatures as they once were. Independent and even some Republican voters have shown they’ll still vote for moderate Democrats, which is why Nickel is now claiming to be one. Yet, no matter how many times Wiley Nickel tells voters he’s a moderate, his voting record demonstrates otherwise.