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Proposed food tax hike gets a stale reception

b122Even before the General Assembly begins debating tax reform, a proposal by Republican lawmakers to lower the individual and corporate income tax is drawing a wary eye. To replace that revenue, lawmakers would look at a higher state sales tax on food and other items.

Senate President Phil Berger’s proposal drew this response from the editorial board of the Greenville Daily Reflector:

‘While the Legislature is correct to examine all aspects of taxation, it should not seek to balance its books on the backs of the least fortunate, as a food tax attempts to do.’

‘On that point, the Senate leader is misguided. While North Carolina should have a tax code that is fair and makes the state more competitive, regressive taxes inflict tremendous harm on the poor. McCrory should state clearly that food taxes are a non-starter in Raleigh.’

The Greensboro News & Record also questions the Senate leader’s call for a broad-based, consumption tax:

‘….proponents of tax reform generally list “revenue neutrality” as a goal. Berger clearly believes state government should make do with less money. Presumably, he would favor reform that delivers lower revenues than today’s recession-era level. Is that really desirable?

Second, how would the burden of paying taxes be redistributed? A sales tax is regressive because people with modest incomes are compelled to spend most of what they earn rather than save or invest it….

Raising the tax on groceries could be hurtful and unfair, particularly if it’s meant to help make up for revenue lost by eliminating income taxes on high earners.

North Carolina must devise a tax system that raises enough revenue to fund critical services and make productive investments, and that also requires those who can best afford it pay the largest shares. A nearly 8 percent tax on groceries for the poor would earn the politicians responsible a bad name.’

You can read the Greensboro News & Record’s full editorial here, and the Daily Reflector’s here.

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Proposed food tax hike gets a stale reception