Public finance expert: North Carolina tax system is “stupid”

Their plans and processes may remain shrouded in mystery, but give the state Senate credit for allowing its Finance Committee to hear some straight talk this afternoon from the experts at the Institute for Emerging Issues. One of the highlights came when Prof. Roland Stephen told the gathering that North Carolina’s current system is “stupid” and “dumb.”

According to Stephen, North Carolina has a worst-of-all-worlds system in which its tax rates are comparatively high and its overall tax “burden”  (i.e. what people and corporations really pay) are very low. This is, of course, because the current structure is chock-full of loopholes and exemptions at the same time that the base of what we tax is very narrow.

Stephen (as well as the other speakers, John Sanders and Roby Sawyers) spoke of the need voiced in many circles (including N.C. Policy Watch and the N.C. Budget and Tax Center) to broaden our tax bases while lowering the overall rates.

According to the co-chairs of the Committee (Senators David Hoyle and Dan Clodfelter) the Committee will reconvene next Wednesday to hear a specific proposal that does precisely that.

It shoud be interesting. As Stephen also acknowledged during his presentation, reforms of this kind can — however logical and necessary — be extremely controversial.  ”Tax reform,” he noted, “is not for the faint of heart.”