Tax Reform: Who gets handed the bucket?

by Brad Crone

My first boss in politics was Lauch Faircloth and he had a very true saying, "never buy anything on the excitement plan."

We may want to take the same approach with tax reform. It sounds good. It really gets the conservative juices flowing but we need to take a real hard look at the details.

I know that the Republicans really want to be able to say they have eliminated the corporate income tax and the personal income tax when they hit the campaign trail next year, but is that fiscally responsible?

There are some early projections that a consumption only tax will not produce enough revenue that the current tax system generates. Some estimates floating around Raleigh say the tax reform measures could be as much as $1.5 billion short in revenue to those monies already collected. How will the Republicans cover that difference if the tax reform isn't revenue neutral?

Most people around the Legislature believe revenue shortfalls will be made up with program and budget cuts.

Finally, there is real concern that a consumption tax gives tax breaks to big business - the banks, the energy companies, the insurance industry -- while additional tax burdens are placed on working families and the middle class. That's going to be the toughest component for the Republicans to sell to the voters of North Carolina.

There is a real feeling among middle class voters that they bailed out the banks, the insurance companies, Wall Street and Detroit and then they were handed the bucket. Is this just another case of the middle class being handed the bucket?

When it comes to tax reform, the Legislature may just want to go slow, very slow.

Brad Crone is president of Campaign Connections, a Raleigh-based political/public affairs consulting firm and a frequent NC SPIN panelist.