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Daily Reflector on Berger’s tax plan: Not a serious attempt at reform
Posted By Clayton Henkel On May 14, 2013 @ 11:37 am In Uncategorized | Comments Disabled
‘Last week, N.C. Senate President Phil Berger formally announced his proposal for comprehensive tax reform, putting in writing many of the rumors swirling about such a plan. If approved, it would eliminate the personal income tax, corporate tax and business franchise fee in what the Eden Republican claimed would be the largest tax cut in state history.
To offset such a massive loss in revenue collection, the state would dramatically expand the scope of the sales tax to cover many more goods and services. It would include taxing prescription drugs and raising the tax on food from 2 percent to 7 percent here in Pitt County.
Analysis of the plan confirms that the end result would be a tax hike for a majority of state residents and a tax cut for only the wealthiest. In no small measure, the plan would shift the burden of funding state government from those atop the economic ladder to those at the bottom. What’s more, it is not revenue neutral and would therefore require significant spending reductions in a state that already pinching pennies for needs like schools and roads.
The state’s outdated tax structure does need reform and changes are likely to expand the sales tax to cover a greater share of services. However, the guiding principle should be constructing a system of fairness that serve North Carolina’s long term interest. That will not be achieved by raising the tax on food to cut the income rates for the richest citizens, especially if it comes at a cost of harming valuable state services. .
That is what leaders in the N.C. Senate propose and why that plan cannot be considered a serious starting point for debate.’
You can read the full editorial here .
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