George Reeves: A fairer tax

January 26, 2013 

A fairer tax

The sales-tax-only proposal being considered by the legislature to eliminate the income tax has a fatal flaw. Many people cheat on out-of-state purchases and do not pay the “use tax” due.

A better solution is the Fair Flat Tax, which simply taxes all income not needed for necessities at the same rate. If we exempt the first $10,000 per person and tax all remaining personal income and retained corporate earnings at a 6 percent rate, then North Carolina would get the $18.5 billion it currently raises from all taxes. This eliminates all other state taxes.

A family of four with a $50,000 income would pay tax only on the $10,000 in excess of their personal exemptions. Poor people would no longer pay state tax, Internet sales tax cheating would end and local retailing and jobs would be revived. The tax structure would be progressive. Investment profits would be taxed when they are taken to be spent and not when the money is simply shifted from one investment to another to encourage job creation.

George Reeves

Raleigh

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