Steal the wealth
Published August 14, 2015
Editorial by Greensboro News-Record, August 14, 2015.
Guilford County isn’t the richest county in the state, but it collects more sales-tax revenue than most. It would keep less of it under a Senate plan that’s now being considered in the House.
This share-the-wealth scheme was devised by Republicans, but it really pits rural against urban interests. Despite boasts in Raleigh of a “Carolina Comeback,” many counties and small towns are in economic decline, bleeding population and tax revenues. Rather than try to grow those economies, some legislators think the answer is to divert sales-tax money generated in urban areas to poorer counties.
Senators backed off initial proposals for a drastic redistribution. But they settled on a formula that’s still bad for Guilford County, which would lose about $750,000 a year, an amount that could increase over time.
“The Senate’s proposal is tantamount to a tax increase,” Guilford County Board of Commissioners Chairman Hank Henning, a Republican, wrote on Facebook. That’s because commissioners would have to raise property taxes to replace the lost revenue.
Wake, Mecklenburg and a few other counties also would lose money. Most counties would gain. The political numbers, at least in the Senate, favor the rural counties.
Senate leader Phil Berger (R-Rockingham) supported the plan, even though his district includes parts of Guilford County. But Rockingham County is a big winner. Sen. Trudy Wade (R-Guilford) voted with Berger, as usual. She called it the best deal available.
The issue is muddled because the Senate added the sales-tax provisions to an economic incentives bill called The N.C. Competes Act. These matters should have been addressed separately. They were combined to win more support for the sales-tax measure.
That’s unfortunate, because the bill offers some benefits, especially for “high-yield projects” — defined as making at least a $500 million private investment and creating 1,750 jobs or more. That would guarantee significant state support if an auto manufacturer could be lured to the “megasite” industrial park under development in northern Randolph County. The bill also offers tax breaks for data server farms and aviation fuel, which could help Guilford County. But those features don’t justify stealing sales-tax revenue.
Some senators argue there’s no stealing at all, just returning tax money paid by rural residents who shop in cities. That’s too simple. Many of those rural residents work in the cities. The cities provide infrastructure and other services that support retailers and their customers. The cities are the economic engines of the state. The legislature wants to use them as cash cows for the rest of North Carolina, but weakening them will have detrimental consequences for everyone.
Guilford County representatives should lead the way in voting down this bill with its wealth-redistribution scheme. The House should revive the N.C. Competes Act, minus the sales-tax provisions. The state can’t build up sagging rural economies by robbing urban areas of tax revenues they’ve earned. That won’t make anyone richer.
August 14, 2015 at 9:31 am
bruce stanley says:
I thought Democrats were champions of the downtrodden. I thought Democrats wanted to help the rural NC poor people? I guess not if it means the urban bureaucrats will have less money to spend. Also, what's wrong with cutting waste and local government bloat rather than raising property taxes?
August 14, 2015 at 10:12 am
Richard L Bunce says:
So what pray tell kind sirs at the GNR, what is the stated editorial position of your newspaper on the collection of sales tax by out of State business for sales to residents of NC? Is your position that to do so is "stealing the wealth" pf the other States? Is it a "scheme" you vehemently oppose? Would it be "tantamount to a tax increase" for those other States? Something is "too simple" here... and that would be the editors knee jerk reaction to anything proposed by this Legislature. The word hypocrisy also comes to mind with regard to these same opponents position on the collection of sales tax on out of State sales... never of course laying the fault of the majority of residents (aka voters) who fail to pay the use tax that is due.
As for my position, no hypocrisy here. Government should end all private business acting as it's tax man, for instance sales tax and payroll tax withholding. Each government wishing to tax it's residents would bill them directly... monthly would be appropriate. I suspect under those conditions the votes for a smaller government would increase substantially.
