Botching Tax Reform
Why the N.C. Senate's tax proposal would be a disaster for North Carolinians
On the subject of North Carolina's tax overhaul — whatever that turns out to be — it really does come down to this:
The sales tax, of course, is regressive. The more the state leans on it for revenue, the more it leans on those least able to pay. Rucho doesn’t see it that way. For him, it’s fair because there’s one sales tax and everybody pays it.
“Everybody’s going to be treated exactly the same,” he said.
The problem is that, income-wise, everybody is not the same. A truly fair tax code recognizes the difference between the struggling and the well-off and has those who have more pay more.
Republicans talk about making the tax code fairer – the Republican Senate bill is called the N.C. Fair Tax Act – but they can’t let go of the idea that if the rich were just taxed less everyone would prosper. That hasn’t worked and it won’t work.
The N&O editorial is referring to the N.C. Senate's tax proposal, developed and pushed most strongly by Matthews' own Sen. Bob Rucho, which would cut the state income tax rate and (presumably) make up the difference through expanded sales tax collections and taxes on Social Security.
The rich pay way less, proportionally; the poor pay far more on basics such as food and medicine. That this is under serious consideration is pretty damned horrifying, and not just because it would stroke the people who least need it and grind poor and working folks under an even heavier boot heel.
It's myopic and illogical. Rucho and his crew anticipate sales tax collections to boom under the new "consumption-based" tax plan. You have a state with a high unemployment rate and slashed unemployment benefits (and therefore virtually no buying power) and a continued dearth of jobs. Tell me — who's going to consume all these goods and services, and buy them with what, when you're raising the taxes on the goods and taking money out of the consumers' pockets?