North Carolina Voters Warm to Local Sales Taxes in Face of State Budget Cuts

The tide of anti-tax sentiment may finally be ebbing here in North Carolina.

Voters in six North Carolina counties went to the polls this year to vote on increasing the local sales tax rate to support public investments in education, economic development, and transit.  In all six cases, voters approved adding a quarter-cent or more to the local sales tax rate.

Last night, voters in four North Carolina counties – Buncombe, Durham, Montgomery, and Orange — approved raising the local sales tax rate.  Those approvals come on the heels of two successful sales tax referenda in Cabarrus and Halifax counties earlier this year.

These results contrast sharply with similar referenda in recent years.  Last year, amidst the rise of the anti-tax Tea Party, voters in 16 North Carolina counties rejected increasing the local sales tax to fund public investments.  Only in seven counties did voters approve adding a quarter-cent to the local sales tax, and none of those approvals came during the November election.

Yet even in 2008, long before the rise of the Tea Party and hardly an election year noted for strong anti-tax sentiment, 31 counties rejected increasing the local sales tax compared to only three counties that approved an increase.

The major shift in voters’ attitudes toward increasing taxes to pay for local public investments is almost surely associated with the increasing awareness of the vital role of public investments and services in creating vibrant, economically secure communities, especially as the results of budget cuts at the state and local level have become more and more visible in recent months.

Voters may never be enthusiastic about the prospect of raising taxes, but the evidence suggests that they are increasingly willing to step up to ensure adequate funding for the public investments and services that those tax dollars make possible.

9 Comments

  1. david esmay

    November 9, 2011 at 1:39 pm

    There’s a great article in Rolling Stone by Tim Dickinson, “How the GOP became the party of the rich”, and it out lines their “starve the beast” ideology, the damage it has wrought on our country. It includes some great comments and observations by old line republicans like Alan Simpson, Lincoln Chafee, Bruce Bartlett, and David Stockman. Nobel laureate Joseph Stiglitz also contributes to the debate. I really believe this is a bell weather of things to come, a backlash, and rejection of the tea party progeny, folks like Cantor and Ryan, McConnell and Boehner, Tillis, Berger, and Stam. Men who would sacrifice their state and country for the sake of a misguided ideology.

  2. Alex

    November 9, 2011 at 1:57 pm

    If you want to see real damage, just wait till our debt load becomes unmanageable like much of the European welfare states.The economic and political turmoil surrounding these countries is a warning to us that we are unfortunately not heeding.

  3. david esmay

    November 9, 2011 at 3:40 pm

    GOP supplysidetrickledowntaxcutonomics has put us right on par with them. Look around you, you’re in the apex of the vortex of the y zone of the e zone of economic turmoil brought to us by the GOP. Ever listen to Dylan? The GOP’s theme song and your’s should be, “Idiot Wind”,” it’s blowing every time you move your teeth, you’re an idiot, babe. It’s a wonder how you still know how to breathe.”

  4. Alex

    November 9, 2011 at 4:11 pm

    They say the nice thing about being an idiot is that you never how stupid you are. I would certainly say you meet those qualifications.

  5. Terry

    November 10, 2011 at 7:58 am

    I apologize for David’s disrespectful comments, I have no doubt you are thoughful and quite bright.

    I do think, though, that there are two sides to the deficit, expenses AND revenue. I’d like to live in a community with decent public services and I’m willing to pay for them.

    I also think “ability to pay” should be a factor in how taxes are levied. My husband and I have been very fortunate and the impact of a few percentage points increase in income tax on our life styles would be significantly less than on a person earning in the bottom quartile. I don’t incomes should be equal, but neither should tax burdens. All I’m saying is that ability to pay should be a factor and paying taxes is a pretty high quality problem, for those at my end of the spectrum.

    I do find it interesting that in Greece and Italy, tax evasion is a national pasttime. Sounds more corrupt that patriotic to me.

  6. Alex

    November 10, 2011 at 8:47 am

    Thanks for your comments Terry. My point is that the tax picture is often distorted by the media. 47% of US citizens pay no taxes at all so the lower quartile does not seem to be overly burdened in my opinion. Many get Earned Income dollars back even though they paid no taxes, so the higher income folks are essentially paying the bulk of the taxes now. Last year I paid $10,000 in federal taxes, $ 3,000 in state taxes, $2,500 in local property taxes, $1,500 in sales taxes, $500 in gas and excise taxes, and $6,120 in payroll taxes, so I went way over the Buffett 17% figure which I think is very distorted. I would not object to paying more if I knew the government would spend the money wisely, and not just throw away at least 20% of it in useless programs. The old adage that you send a $1.00 to Washington, and get 50 cents back is probably correct.

  7. Ed McLenaghan

    November 10, 2011 at 8:57 am

    Thanks for the thoughtful comments, Terry. I should have noted in the post that the down-side to voters warming to local-option sales taxes is that sales taxes hit low-income families’ and seniors’ household budgets much harder than households with a greater ability to pay.

    And, Alex, you might want to note that the 47% figure is for federal income taxes only (not payroll taxes, federal excise taxes, property taxes, sales taxes, etc.) and is temporarily at a high level due to the recession and, to a lesser extent, temporary anti-recessionary policies. (Another reason is that an increasing share of households are elderly and retired.)

    http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm

    Citizens for Tax Justice had a great piece up earlier this year showing the incidence of all taxes – federal, state, and local – and the result is that the overall tax system isn’t as progressive as is often assumed:

    http://www.ctj.org/pdf/taxday2011.pdf

    Furthermore, with regard to the EITC, there was a great new paper showing that most EITC recipients rely on the tax credit only temporarily (1 or 2 years at a time) during times of personal financial hardship. Families that receive the EITC end up paying much more in federal income taxes during their working years than they receive in EITC benefits. You can read a summary of the paper here:

    http://www.offthechartsblog.org/new-research-highlights-importance-of-eitc-for-working-families/

  8. david esmay

    November 10, 2011 at 10:23 am

    That 47% figure that the GOP candidates and pundits like to throw around does, as Ed pointed out, applies to federal income tax only. The reality is that, even though lower wage earners may not pay federal taxes, when it comes to state and local taxes, the poor bear a heavier burden percentage wise in every state except Vermont. This is where that 47% figure is used in a disingenuous manner. While its true the top 1% paid 38% of fed. income taxes in 2008, the latest year that info is availble from IRS, what your forgetting, is that fed income tax comprises less than half of federal taxes, and about one fifth of taxes at all levels of government. SS, medicare, and unemployment insurance(payroll tax), are paid by the bottom 90%, after $106,800 you don’t pay SS. According to the latest figures from the IRS the top 400 earners paid an average of 16.6% in income tax, the rest of us about 22.5%. What repubs never discuss about that vaunted 47% figure, is that it includes people like hedge fund manager and Boehner’s largest donor John Paulson, who made 9 billion over the last two years and paid 0% in taxes. By claiming it as “carried interest”, and simply using that as collateral to obtain low interest loans to cover living expenses. Or how about the Mcourts who owned the Dodgers, according to their divorce papers have not paid taxes since 2004, and yet spent 45M in one year, by borrowing against ticket revenues and other assets, they would look like paupers to the IRS. Donald Trump, who through loop holes has claimed negative incomes for years while living lavishly. That is why rights arguement that spending and taxes are the problem is fundementally flawed, but facts never got in the GOP’s way before, why should they now?

  9. JT

    November 11, 2011 at 6:43 am

    Like Alex, I pay a hefty bill to multiple tax collectors each year, and the socialistic ideology has to be snuffed out. I appreciate Alex’ rebuttal of David’s liberalistic view of feed the beast – hooray for big government to give more to the poor. I vote for straight tax, elimination of more than 50% of government handouts and smaller government.