A telling admission in the local sales tax debate
Published March 25, 2015
by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, March 24, 2015.
One of the most interesting debates of this General Assembly session is about a proposal by Senate Majority Leader Harry Brown to redistribute local sales tax revenue among counties by increasing the share allocated to rural areas and decreasing how much urban areas receive, even though most of the sales happen in the state’s metropolitan areas.
Brown says there are now two North Carolinas, one rich and one poor, and that the General Assembly needs to do something to help the struggling counties and the people who live there.
Two North Carolinas is a phrase straight from Democratic politicians like former Governor Mike Easley and former Senator John Edwards, who talked about two Americas in his presidential campaign.
It’s prompted critics of the plan to call the arch conservative Senator Brown everything from Robin Hood to a socialist, and it’s also the latest of evidence of the well-documented war on cities in the General Assembly in recent years and the increasing divide between the interests of the rural and urban areas of the state.
But there’s another aspect to the issue and Brown’s insistence on diverting more revenue to struggling smaller counties that is more important.
It’s an explicit admission by a key conservative legislative leader that public investments play an important role in a healthy economy and the quality of life for people in North Carolina.
That’s the government that Brown and other right-wing legislators routinely rail against, insisting instead that the best way to create jobs is to slash taxes and government spending to let people keep more of their hard-earned money.
Here’s what Brown said a news conference this week to release his sales tax redistribution plan.
“Reforming our state’s sales tax system will help ensure that all North Carolina counties benefit from tax dollars their own citizens pay so they have the local resources necessary to strengthen public education, attract new jobs and contribute to our state’s economy.”
Brown now believes that government investment helps the schools, creates jobs and helps the overall economy of North Carolina.
He also apparently believes that many local governments across the state are not spending enough and wants them to have additional tax dollars to invest.
Brown and the Senators who support his plan are not saying that local governments in rural areas need the additional revenue to lower their taxes, they are saying that rural counties need the tax money to improve their communities.
That’s quite a noticeable shift in philosophy, claiming that public investments are important and that schools in many areas are underfunded.
And while it is nice that Brown is finally coming to grips with the fact that government plays an important role in North Carolina’s economy, it’s not like he’s seen the light completely.
The Senate leadership recently rolled out an economic development plan that included another round of unwise cuts in the corporate income tax and a huge tax break for out-of-state corporations that, combined, could cost the state hundreds of millions of dollars a year.
And that’s on top of the tax shift of 2013 that gave huge windfalls to big companies and wealthy individuals at a cost that’s grown to more than $700 million this year, forcing more cuts to human services and the schools that Brown thinks are underfunded.
Governor Pat McCrory said the Senate’s latest plan for more corporate tax cuts would break the bank. He’s right, but the bank is already cracked thanks to the 2013 tax changes that McCrory initially pledged would be revenue neutral.
Lawmakers also ended the business privilege license tax which will cost cities more than $60 million, hurting urban centers and the small towns Brown is worried about.
Legislative leaders and Gov. McCrory promised to come up with a plan to replace that lost revenue, but no proposals have been introduced and nobody at the General Assembly seems too concerned about it.
Now their priority, at least among Senate leaders, is to reallocate sales tax proceeds to help rural counties because, as they now situationally believe, tax revenue and public investments make a difference.
It’s a maddeningly inconsistent view, but maybe it’s a start. Government isn’t always the enemy. Just ask Sen. Brown.
http://www.ncpolicywatch.com/2015/03/24/a-telling-admission-in-the-local-sales-tax-debate/
March 25, 2015 at 9:33 am
Frank Burns says:
Brown's proposal needs to be trashed as soon as possible. It's sounds like something that came from Liston Ramsey, Jimmy Green or Bob Jordan. It is totally unfair to residents of Charlotte to have some of their sales taxes diverted to more rural counties. So we will end up getting hit with a higher property tax to make up for the loss of sales tax revenue. This is certainly a communist type of initiative and is therefore ruled as unfair and should be discarded.
March 26, 2015 at 11:39 am
Richard L Bunce says:
Government is all about redistribution. Better to strictly limit how much they take in the first place... because if they take it they will redistribute it... there are votes at stake after all.
March 25, 2015 at 9:58 am
Norm Kelly says:
Government isn't always the enemy. But so far, not one single conservative or Republican has said so. What we have consistently said is that government is USUALLY, ALMOST ALWAYS the problem. Governments have PROVEN that they are terrible, awful, the worst investment bankers on the planet. Governments don't pick winners & losers based on anything useful or factual; they pick winners & losers based on politics, payoffs, favoritism, cronyism, and various other items that are meaningless to actual usefulness.
Have Republican Senators seen the light or are they pandering? It's a well known fact that SOME government expenditure is necessary. This is what libs typically refer to as investment, but is actually, factually, expenditure to allow/promote real economic activity. Things like schools, bridges, roads are usually useful government expenditures. Not always, sometimes these items are also used for political gain, not for useful purposes.
Instead of stealing money from areas where sales tax is generated, how about there be a different revenue generation model that raises money where it's needed. How about leaving money in areas where it's generated. How about leveling, actually leveling the playing field, not playing games like libs are wont to do with telling us they level the playing field but actually only penalize on group to payoff another group. How about creating a business/corporate tax rate/scheme/plan that encourages business from all over the country to move or expand in NC. Instead of having a tax policy that discourages economic activity, either by business or individuals, how about a tax policy/plan that encourages EVERYONE to engage in economic activity in our state.
Take lib mecca's as a perfect example of HOW NOT TO DO TAX POLICY! Like NY where money is leaving. Take examples from areas where true conservatives rule the day, where tax policy is used to encourage instead of penalize. Like Texas. Or Florida. Is tax policy in these places more discouraging than here in NC or more encouraging? Are people and business moving TO or FROM Florida and Texas? Has the economic environment in Wisconsin become MORE or LESS friendly since Scott Walker's policies have been implemented? Let's look at examples of what has worked and what hasn't worked from around the nation. Unlike the community organizer unqualified current occupant, there actually are 50 labs around the country that are doing things differently. Some policies in this great experiment work. Some policies in this great experiment don't work. We shouldn't be trying to recreate the wheel. We should, once again, be ignoring the id10cy of the occupant, his complete ign0r@nce of economic principles, and use real world examples of success from other states that are experimenting and start to take on those same policies. Experiment on our own to see what works and what doesn't, as it fits NC specifically.
What do we know doesn't work? What can factually be stated about some policies? Facts are darn funny things, and usually ignored by libs because facts usually do not support the lib agenda/scheme. Facts show us that liberalism fails every time it's tried. Not just sometimes. But every time. No lib, including Chris, is willing to admit this. Even in view of failure, how do libs respond? Simple. They double down on their schemes and insist that their failure is because they weren't allowed to spend enough or steal enough from producers or allowed to give enough to those who's votes they want to buy. Never is it that the lib scheme simply failed. Our nation is currently about $18TRILLION in debt. How's the poverty situation doing? Even after spending this much money we don't have, has the lib scheme worked, solved the poverty problem? How much more evidence does ANY thinking person need if not spending $18TRILLION and still not having spent enough to show success? At what point do thinking people accept failure? Long before $18TRILLION. Problem is libs aren't pre-disposed to thinking logically. Libs think with their feelings, which are obviously easily misled. We've tried it the lib way. It has failed. It's time we tried it the conservative way. Spreading the wealth is a lib idea. It garners favor among 'the needy', the press, and libs. But it does no good. It produces more even failure and distress, but it doesn't fix failure or distress. Everyone suffering equally is not the same as success. Can we show examples from around the world where socialism equally distributes distress? Yes. Can we show examples where allowing success and failure, where conservatism more evenly spreads the wealth, success, and removes distress? Yes. Which is better for the majority? Obviously the ability to be self-sufficient is better for the majority. There will always be needy amongst us. But individuals with the ability to succeed are much more efficient at helping the needy than ANY government entity or agency. Once again, proof that liberalism is inferior to freedom, conservatism, and the founding principles of the United States.
March 25, 2015 at 10:59 am
Richard L Bunce says:
Chris calling the kettle black... Chris is a big advocate for decreasing inequality until it runs into political affiliation. How about government just ends all redistribution for redistribution's sake. Sales tax should be returned to the local government within which it is collected. Actually sales tax should not be collected at all by the private business but paid on a regular basis by residents based on their self reporting of their purchases, the use tax is already in place for this. Since Chris trusts persons showing up at the polling place to vote to meet the Constitutional requirement to vote surely he trusts them to pay their sales tax.
March 28, 2015 at 10:49 am
Rip Arrowood says:
There's a whole new crop of "Libertarians" popping up this Spring.
It must be the new fad this year in gardens across NC.
March 28, 2015 at 3:00 pm
Richard L Bunce says:
Nothing Libertarian about government redistribution... no matter which political party engages in it.
