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 Tax Reform is Like Pumping Water
by Tom Campbell
April 23, 2009
Trying to change state government can be likened to coaxing water out of a deep well using a hand pump. First you must prime the pump, never sure how much water to pour down the well, but knowing that if you pour too little you have to start all over. Then you pump like crazy trying to get enough suction to bring water up to the top. And when your efforts finally succeed cold, sweet water gushes out the nozzle.
In the issue of tax reform perhaps we have not previously primed the pump enough, or maybe we haven’t pumped vigorously enough or perhaps we gave up too soon for the water at the bottom of a long pipe to rise to the top. Countless studies, blue ribbon panels, and discussions have primed the pump with information about our antiquated tax codes and the need for reform. There have been attempts at change but mostly we have just added more codicils to an already unwieldy plan.
The worst budget crisis in half a century may have finally brought the tax reform subject to the top of consciousness. We can only hope all this talk is not much ado about nothing. Whereas the Senate tax plan released this week is being billed as a “sweeping overhaul” and would expand our tax code it is far from being tax reform. The plan would reduce taxes for some, but the net effect would be more revenue to the state, by our definition a net tax increase. So much work has been done to date that we hope that our leaders will not stop pumping until true reform is achieved. Here are several criteria to be considered in tax reform.
First, this process must be transparent. North Carolina has had enough decisions made behind closed doors. If our representatives are going to make decisions that affect every person in our state we have a right to know what is being discussed and decided. Next, this process and resultant changes must be fair to all, not just to a handful of special interests with their powerful lobbyists. In years past too many loopholes, exceptions and preferences have resulted in too much in lost revenues. We must clearly understand that tax policy is about revenue generation, not a vehicle to legislate or enforce political or social agendas. And, knowing how long it has taken us to get to tax reforms, we must insist that these changes be made for the long term, not just to get us through this economic crisis.
Finally, true tax reform must significantly change our taxes codes and not end up as a cleverly disguised tax increase. We would respectfully ask our lawmakers to show us the changes necessary to make our codes revenue neutral, meaning what would generate the same level of revenues as the state currently receives. This is true transparency. If additional state revenues are needed (tax increases) we should be informed what changes will be made to generate them.
We sincerely applaud the efforts to date and hope this is a harbinger of what is come, not just more frantic hand-pumping that patches and adds to the current outdated tax codes of our state. It is time to fix our tax codes, a good time to be doing it and could be the single biggest accomplishment of our legislature in years. |
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