The Follies

The Follies

- in Fitzsimon File

Putting a number on absurd tax reform proposals

Several political candidates and the right-wing think tanks that support them are talking about radical tax reform next year, though they almost never explain what that would actually mean.

Proposals to eliminate the corporate and personal income taxes are mentioned frequently as the way to make North Carolina more competitive, lower its tax burden, attract jobs, etc., with virtually no discussion about what would happen to state revenues as a result.

Personal and corporate income taxes bring in almost 60 percent of the roughly $20 billion state budget, or $12 billion. That’s a lot of revenue to lose.

The only alternative suggested by the income tax abolishers is to rename the sales tax a consumption tax and increase it to make up some of the difference—some being the key word.

The far-right think tanks want to slash public investments of course, so they see tax reform as a chance to fulfill their dream of dramatically reducing state revenues regardless of the schools it would close or human services it would end to the most vulnerable people in the state.

A new report from the N.C. Budget and Tax Center about the sales tax ought to be required reading for politicians talking about tax reform and for reporters covering the campaigns.

It makes the case for a broader sales tax, one that covers more services. The rate could be lowered if the base was broader. That would make the tax less regressive too, since higher-income families are more likely to spend money on services that are not currently taxed.

Just as important given the current political debate is what the report says about the absurd ideas to eliminate the personal and corporate income taxes.

The state sales or consumption tax would have to increase to 13.88 percent to keep state revenues the same and that does not include the local portion of the current sales tax structure.

Unless local governments are willing to lose hundreds of millions of dollars, that could mean an effective sales tax rate of more than 15 percent if the income tax abolishers get their way. It would also make the state tax code even more regressive, forcing low-income families to pay higher taxes as a percentage of their income and allow the wealthiest North Carolinians to pay less.

That seems like something the candidates blathering on about abolishing all income taxes ought to have to address.

Why do they want a 15 percent sales tax that makes life harder on low-income and middle class taxpayers while giving the wealthy a break?

The fraud about voter fraud continues

A recent Asheville Citizen-Times headline summarized a key theme of this campaign season, “Voter fraud elusive, GOP finds.”

Republican political operatives in North Carolina and around the country continue to claim that widespread voter fraud is a problem in our elections. And their claims continue to be proven unfounded.

The Citizen-Times story from staff writers and wire services included a telling roundup of fraud claims from several states, all of which end the same way. For example, the Republican Secretary of State in Colorado initially claimed there were 11,805 noncitizens on the voter rolls in his state.

As the investigation began, the number kept going down and eventually declined to 141 with 35 apparently having voted. But Denver voting officials, where eight of the suspected noncitizens had cast ballots, did some checking of their own and found that all eight actually appear to be citizens who voted legally.

Whoops.

It turns out the Secretary of State didn’t know what he was talking about, but the allegations continue in state after state, including North Carolina, and are used as justification for voter suppression efforts which wind up making it more difficult for people to cast their ballot, generally people unlikely to vote for Republican candidates.

Chairmanships for sale

The most disturbing story of the week about our political system had nothing to do with voter fraud. It was about the implication that House Speaker Thom Tillis might be selling committee chairmanships to Republican candidates who raise the most money for the House Republican Caucus that Tillis controls.

It wasn’t some anonymous tipster that revealed the scheme. It was a Republican candidate for the House.

Yes Weekly reported that Debra Conrad, a Republican who is running to replace Rep. Dale Folwell from Winston-Salem, told a luncheon crowd that “….the more money you raise and give to the speaker, the better committee assignment you get.”

That seems pretty clear. A spokesman for Tillis denied the allegation, saying that there’s no correlation between contributions to the caucus and committee appointments.

Whew. Seemed like for a second there that big money was influencing our General Assembly leaders. Surely that is not happening.

About the author

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina.
chris@ncpolicywatch.com
919-861-2066