Tax-and-spend GOP?

March 21, 2013 

Remember all those times in 2012 that gubernatorial candidate Pat McCrory talked about repealing the “death tax,” and cutting the corporate income tax and perhaps even eliminating the personal income tax? Yes, indeed, that fellow never met a tax he liked. But now, Gov. McCrory may wind up signing off on what Democrats, long criticized for being tax-and-spenders, will undoubtedly call massive tax increases.

It seems that Republicans in the General Assembly, while they may spend most of their time attacking the poor and the middle class, do know something about addition and subtraction, and they’re aware that if they cut the income tax and the corporate tax, they’ll have to make up lost revenue. For that, GOP legislative leaders are looking a taxes on “services,” a general term applying to things like haircuts, lawn services, shoe repair, pet grooming, car washes, even diaper services. There would be a sales tax on such services.

This is a bad idea, of course, for middle-class and lower-income people, who’d get hit the hardest, whereas the wealthy wouldn’t feel much of a hit. A services tax is, in other words, a regressive tax, as opposed to income and property taxes, where those who make more or have more rightly pay more.

And back to math: A services tax would by one study bring in about $44 million a year. Corporate and personal income taxes bring in $12 billion a year. Finding that other $11 billion and change should be no problem for the geniuses of Jones Street.

The best tax system is progressive, in which those who benefit the most from a good economy through income and investment income pay their fair share. That type of tax is reliable and predictable.

When sales taxes are put in the mix to an excessive degree, there is an unfair shift in the tax burden, which is exactly what this scenario is. It is an intentional, calculated shift downward, where people can least afford another burden.

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