Take from the rich, give to the poor?

Editorial by Charlotte Observer, January 12, 2015.

Take from the rich, give to the poor.

That’s not a mantra you typically hear coming from North Carolina’s conservative Republican lawmakers. But top GOP leaders sound like they’re inclined to do just that as they head back to Raleigh for the new legislative session.

They don’t want to take money out of the pockets of rich people and give it to the poor. That would be downright socialistic. A redistribution of wealth. Might even be communistic.

But Senate Majority Leader Harry Brown of Onslow County has suggested redirecting some of the sales tax wealth generated in Mecklenburg and other urban counties to the coffers of poorer rural counties. Struggling counties such as Bertie and Rutherford would get a much-needed hand up, as he sees it.

Republican leaders have suggested doing this by tweaking the state’s formula for distributing sales tax proceeds. Currently most of the money, about 75 percent, goes to the counties where the goods were sold.

The other 25 percent is shared on a per-capita basis. That helps rural counties, which can only dream of the sales taxes generated by a SouthPark Mall.

But that aid isn’t enough, apparently. Brown has spoken passionately about there being “two North Carolinas” – struggling, increasingly frustrated rural counties, and the increasingly prosperous urban areas of Charlotte, Raleigh-Durham and Greensboro.

He believes rural areas can compete better if they can supplement their withered tax bases. Sen. Bob Rucho of Matthews, who took a big hand in crafting 2013’s tax-cut package, told the Observer’s Jim Morrill it’s an idea lawmakers will study in the upcoming session. Every county ought to share in the prosperity, he says.

But hold on. Lawmakers can help rural areas without slicing into revenue fast-growing urban counties desperately need to accommodate new residents.

There’s already a tradition of that in North Carolina.

The state’s low-wealth school formula, which directs additional money to needy school systems, benefits rural education. And companies looking to relocate to North Carolina get beefier tax incentives if they pick a rural county.

Still, post-recession Charlotte and Raleigh are booming. It’s easy to understand why the rural Republicans who now dominate the legislature are frustrated by the slower pace of growth in their areas.

But today’s businesses – especially fast-growing tech firms – want to be in big cities. They want strong transportation networks, well-educated workforces, and cool social outlets like professional sports.

That’s why businesses set up shop in Charlotte. That’s why new residents keep coming. That’s why they keep spending at SouthPark Mall. It’s only fair that most of the sales taxes generated here be reinvested right here.

Lawmakers need to approach this idea with caution. The state must assist its struggling rural areas. But hurting the main engines of its economy isn’t the way.

http://www.charlotteobserver.com/2015/01/12/v-print/5442821/take-from-rich-give-to-the-poor.html