Maybe if you’d quit calling here so danged much we could finish what we have to do.
Those aren’t the exact words used by the mechanic working on my truck when I called him 17 times in two days, but that’s the message his tone conveyed after the 14th call.
As North Carolina residents know, a new sales tax on repair, installation and maintenance services kicked in last Tuesday. Among the services now being taxed are auto repairs. A $200 repair will mean about $15 extra in taxes, but since nothing on a 20-year-old truck costs as little as $200 to repair, I shall always be looking at spending way more than an extra $15.
With the cost of the most recent repair – a major transplant – that new tax would add an extra $300 to my repair bill.
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That’s why I wore the dude’s telephone out in the days leading up to the tax, to see if he could hurry up and finish before the new tax kicked in.
Me: Say, man. How we looking over there?
Him: Look, we’re working on it as fast as we can.
That was always – no, almost always – his response. One time it was “We need more money from you.”
I liked it better when he said we’re working on it as fast as we can.
He said, surprisingly, that there had not been a last-minute rush of people trying to get their repair work completed before the new tax took a’hold – probably because it passed more than a year ago and the General Assembly thought we’d forget about it if they just eased on into it.
The extra $300 in tax I’d have had to pay had I not beaten the tax deadline – Halleluyer! – would have hurt, but it wouldn’t have devastated my budget.
State Rep. Ken Waddell said, “They wanted to give everybody a chance to get used to it, but nobody’s going to get used to it until they actually see it in place.”
Most of us won’t get used to it even then. I called Waddell because even though he voted for the tax last year, he admitted then that he had reservations about it. “All of of us had reservations about it,” he said Monday.
The extra $300 in tax I’d have had to pay had I not beaten the tax deadline – Halleluyer! – would have hurt, but it wouldn’t have devastated my budget. Oh, dinner for a few nights would’ve been Vienna sausages, choke-and-jelly sandwiches and honey buns, and entertainment would’ve consisted of massaging a six-pack of Milwaukee’s Best and watching bugs fly into the bug zapper until the budget reset itself.
For some people, though, that extra lick could hurt really bad, and the budget might take months to reset itself. On the government’s Bureau of Labor Statistics website, you see that poor people keep their cars longer and – guess what? – older cars need more repairs.
Michael Walden, an economist at N.C. State University, said the legislature was “weighing efficiency against equity. Their philosophy is that they want to tax income less, but they want to make up for it by taxing consumption or spending. ... The downside of that is that sales taxes tend to be more regressive than income taxes. Someone at the low end of the economic ladder is going to pay a higher percentage of their income” on sales taxes than someone at the higher end.
“The sales tax is going to be more burdensome (on poor people) than the income tax,” he said. “Even if you agree with that philosophy” of the sales tax, “they’ve sort of hurt themselves because they’ve gone along and picked out particular kinds of spending to tax rather than taxing all spending.”
As an economist, Walden said he’s not taking a position on the issue, which is understandable, since economists are merely supposed to give both sides of an issue.
That, of course, is why a frustrated President Harry Truman said, “Give me a one-handed economist! All my economists say, ‘On the one hand? On the other.’”
In the battle between what Walden called “efficiency” and “equity,” equity lost and poor people didn’t get either hand from the legislature. They got a finger, though.