The next wealth distribution division
Published December 27, 2014
Editorial by Greensboro News-Record, December 27, 2014.
Republican state legislators who enacted a major tax overhaul last year aren’t done. Not by a long shot.
The first round of tax reform was opposed by Democrats. It included steep cuts in the corporate income tax and at the highest personal income-tax rate, plus a broadening of the sales-tax base. The next round may pit poor rural counties against wealthier urban counties.
Senate Majority Leader Harry Brown, R-Onslow, told the N.C. FreeEnterprise Foundation earlier this month that legislative leaders are talking about shifting more sales-tax revenues from urban counties to rural ones.
“That will be a huge debate,” he said. “I think it’s something we ought to look at.”
It won’t be well-received in Guilford County. Justin Conrad, a newly seated Republican commissioner, wrote on his Facebook page: “This type of wealth redistribution scheme could have disastrous effects for our fragile economy. I hope our local legislators agree with me and will fight against this very bad idea.”
He drew support from Commissioner Jeff Phillips and state Rep. Jon Hardister, both Republicans.
The problem is that rural counties are strongly represented among Republican legislators, especially in the Senate.
A Senate debate on local-option sales-tax authority in July revealed festering resentments.
“It’s becoming two North Carolinas,” Brown said then. “That’s another issue we’ve got to deal with eventually, is how sales-tax revenues are distributed out across the state because the wealthy counties continue to get richer and the poor get poorer.”
About three-fourths of sales-tax revenue is sent back to the counties where purchases are made, with the rest distributed on the basis of population.
Small, rural counties are hurt both ways. They don’t have as many shopping centers, car dealers, restaurants and other places where people spend money. Worse, many are losing population — 34 of them from 2010 to 2013, according to the Office of State Budget and Management. They struggle to raise the money for schools, public safety and other services.
The state provides additional resources to poorer communities, but not enough to create a level playing field.
The state should not, however, devise policies to prevent the “rich from getting richer.” Some of the “rich,” if Guilford County is included in that category, are hardly wealthy, anyway.
It is true that Guilford County collects sales-tax revenue from people who live in neighboring counties but come here to shop or eat at restaurants. Yet Guilford County also uses the revenue to maintain infrastructure that helps produce more jobs — many of which are filled by residents of those other counties.
This subject is worth a serious discussion, but it shouldn’t be driven by envy, resentment or politics. North Carolina won’t help its poorer counties by weakening its more successful urban areas.
December 27, 2014 at 11:06 am
Richard Bunce says:
"The next wealth distribution division
The first round of tax reform was opposed by Democrats. It included steep cuts in the corporate income tax and at the highest personal income-tax rate, plus a broadening of the sales-tax base. The next round may pit poor rural counties against wealthier urban counties."
The implication here is that the previous round of tax rate reductions was a wealth distribution scheme. Reducing the government confiscation of wealth from it's owners so that these owner's retain their wealth is hardly redistribution of anything. It is reducing the ongoing and usually increasing redistribution efforts of government.
December 27, 2014 at 1:51 pm
Norm Kelly says:
'The first round of tax reform was opposed by Democrats'. Wonder why. What is it about tax reform that is opposed by the demons? Do we care, since their policies were REJECTED by voters. You know, the policies that raise taxes, raise fees, spend money on useless projects where it shouldn't be spent, pit one group of people/businesses against another group. Those policies.
So, let's look at the objections from the left. 'It included steep cuts in the corporate income tax and at the highest personal income-tax rate'. There you go. Sufficient explanation. It included tax cuts. Nothing else needs to be said to understand why libs opposed the tax reform implemented by Republicans. We all know that the libs would have opposed it just because it was proposed by Republicans. They are, after all, the party of 'NO'! But what made the deal even more unpalatable for libs is the idea of TAX CUTS! When was the last time libs endorsed a tax cut? Even when libs claim a spending cut, we all know it's not really a cut in the actual spending, just a cut in the size of the INCREASE in spending that they WANTED to do. And since the ones paying taxes, the 'rich', were the ones who got the majority of the tax cuts, libs hated the idea even more. It's not like libs to enjoy allowing people to keep their own money. And libs especially hate allowing 'the rich' to keep their own money. Libs love the idea of playing favorites with tax dollars, so implementing a broad tax cut for all businesses does not fit into the lib playbook. Libs only like cutting taxes when they get to CHOOSE who benefits, and it better be one of the favored groups to receive the lib largesse. 'Incentives' for one company or group is good; tax cuts for every business is bad because it takes libs out of the game; their schemes can't happen if they aren't in the picture!
Want another reason why libs disliked the Republican plan? 'plus a broadening of the sales-tax base'. Having more items affected by a sales tax doesn't allow libs to play games with favored groups. If the sales tax applied to everything or nothing, it would be completely fair. It also takes the pols out of the money playing game. Just think, if every single thing was affected exactly the same by a sales tax, then the state would be able to lower the tax rate, everyone would be affected exactly the same way, and there would be no question at checkout whether an item was taxed or not! In Wake I believe the tax rate currently is 6.5%. Imagine if the tax applied to everything, and the rate could come down to say 2 or 3 percent. Less tax on each item, but a more easily understood system. Yeah, I know, there could be a cap on some major purchases. Some would insist. But this allows pols to play games once again, and we know from history that this just allows them to screw things up again. Our goal should be to get pols completely out of the economy with their schemes and games. Allowing pols to play games in any way with sales tax rates/policies would just encourage them to do so. Which ends up with idiot1c policies once again, similar to the 'tax free weekend' that the libs foisted upon us when they realized the tax rate was too high and were getting close to creating a revolt among (legal) residents.
September 29, 2016 at 9:08 am
William Jones says:
A bit hypocritical considering Guilford County refuses to share any sales tax money with the small towns based on population. I guess sometimes redistribution is good. For them!
