Durham News: Opinion

Bob Wilson: New state tax code unfair to seniors

If taxes are what we pay for civilized society, we must be doing well in Durham. Soon we will be doing even better, for this is tax season and the legislature is in session.

Some taxation really is the price we pay for the veneer of civilization, so no one should get bent out of shape about a likely property tax increase in the city to help pay for additional police officers and firefighters.

Durham needs more police officers, especially for the night watch and at all hours in troublesome Northeast Central Durham. So go for this one with a clean conscience, City Council.

But for every justified tax increase, the vexatious laws of politics demand an opposite reaction.

Many Durham seniors, like their counterparts all over North Carolina, got Tasered this year by changes in the state tax code wrought by the GOP-dominated General Assembly. My wife Betty and I certainly did.

We were among the lucky ones, I suppose. From a $118 refund in 2014 to a $481 hit this year is in the middle range of what other seniors are reporting. In some cases, retirees are paying more than $1,000 beyond what they expected.

In their zeal to modernize the state’s creaking tax code, lawmakers got carried way. They eliminated deductions for medical expenses, long-term care insurance and the like, figuring that a flat 5.75 percent income tax rate and extending the sales tax to some services would help balance the equation.

In theory, such changes should result in a fairer tax code. But in practice, the reform is a blow to seniors and North Carolina’s reputation as a retiree-friendly state.

Nothing can be done about it this year. But the state House, with its ear closer to the ground than the Senate, is warming to a correction for 2016.

Apparently, none of the tax-writers in the General Assembly stopped long enough to think about the sharply higher medical expenses incurred by seniors. They grow more burdensome every year as Medicare benefits fail to keep pace with expenses.

Restoring the medical deduction for seniors would cost the state an estimated $37.9 million. Surely the General Assembly could find that amount in a $21.5 billion budget, especially when the honorables tossed American Airlines a $10 million tax break on jet fuel.

An airline has an elastic revenue stream that seniors, most of whom live on fixed incomes, don’t. As medical or other costs rise, seniors have to dip deeper into rainy-day funds for co-pays and co-insurance.

At the root of all this is the state’s attempt to stay in the industrial incentives game, having watched South Carolina, Alabama, Georgia and Mississippi lure one auto manufacturer after another.

Industrial incentives are a necessary evil in today’s economy, and I can’t blame the honorables for blessing them. At the same time, the state’s human needs shouldn’t be held hostage to such a questionable policy.

There will always be winners and losers in a tax code. The impossibly complex federal tax code is the model for robbing Peter to pay Paul, but it’s not unreasonable to expect our state tax laws to be better attuned to the needs of the people.

Because seniors tend to vote in larger numbers than younger age groups, lawmakers had better tend to their aging constituents or else.

The Senate is said to be less inclined toward restoring the medical costs deduction than the House is. However, I suspect the Senate will move to the Amen Corner ‘ere long – its hearing is acute, too.