Sales tax regressive?

Opinion

February 20, 2013

Sales tax regressive?

FOR THE DAILY SOUTHERNER Bob Harper The Daily Southerner Wed Feb 20, 2013, 04:54 PM EST

TARBORO — The possibility of North Carolina doing away with a state income tax and going with a sales tax has gotten a lot of liberals in an uproar. “It’s a regressive tax,” they yell. “It hits the poor and favors the rich.” This is a very ‘knee jerk’ reaction when we really look at the facts.

First we look at how North Carolina is doing economically with our current income tax and we find we’re 47th in unemployment. So something just isn’t working.

Businesses and entrepreneurs don’t see North Carolina as an ideal place to start a company or move their current company here. If you were a CEO (Chief Executive Officer) of a top company would you move your company to? First, the CEO knows that he and his employees will be paying higher personal taxes. In addition his company will pay corporate taxes.

The fact is that the no income tax, but sales tax states have much less unemployment than the income tax states. So if we want jobs, then killing the income tax and going with a sales tax is a no brainer. States that tax less achieve better economic performance. The secret to this is simple — lower taxes and better control of spending. States with an income tax spent 42 percent more per resident in 2011 than the states without an income tax.

Every state is faced with funding public schools, prisons, social-service programs, etc. However some states do a much better job of managing their resources. The employers in no income tax states are reaping benefits that enable them to pay more in salaries and to expand and add on more employees.

No income tax states had a private sector growth of 59 percent of Gross Domestic Product versus only 42 percent in the states with an income tax. Jobs in no income tax states grew by 4.9 percent versus just 2.6 percent in income tax states over the past 10 years. Their populations grew, too, by 5.5 percent from domestic migration while all other states lost 1.3 percent in population growth. People just like no income tax states better than income tax states.

It might be helpful to take a look at some states that have experience going from a no income tax state to having an income tax on its citizens. A prime example is the state of Connecticut. For 200 years Connecticut balanced its budget without any income tax and became one of the richest states in the country. But, that changed in 1991 with the introduction of their first ever income tax of 4.5 percent. In 2001, the tax was increased to 5 percent.

Connecticut began to lose population as people and jobs left the state. The state income tax did stimulate one thing … there was a huge spending spree and huge pay raises for state unionized government workers. In the state of Maryland, they passed a similar income tax in the name of “fairness.” Does that term, “fairness” ring a bell?

This so called “fairness” caused a third of the millionaires in Connecticut to leave the state. Who cares about that, everyone hates millionaires anyway, right? Gee, I would think every state should want as many millionaires living in there state as possible, they spend a lot of money and would pay a lot in sales taxes. Of course, states like Texas and Florida benefited a great deal from this exodus from Connecticut and other income tax states.

Then, take the state of California ... please take the state of California, some Californians may say. California is a basket case and is losing population and jobs because of high taxes, uncontrollable unions and a general business unfriendly attitude.

A few things that could help are to move away from federal control of so many of our welfare programs and put state and local governments back in charge. Still, the best way to deal with poverty is with economic growth.

I think most of us want to take care of those who are mentally or physically unable to work and for those who may be living in poverty. One big problem with getting as many people off of welfare and into a real job is that a lot of welfare bureaucracies don’t have much incentive to actually reduce poverty. After all, it’s a great, well-paying job for tens of thousands of bureaucrats who don’t want to see the roles of welfare recipients decrease and have their own income decrease.

We have a tremendous underground economy in this country and in this state. Think of how many people do work for individuals or families. These families and individuals cannot report the cost of this work as an expense on their income tax report. A company could report this as a business cost, but not an individual or family. Think of how many people do work and are paid in cash and never pay any income tax on this income. They would, however, pay a state sales tax.

But, we still need to concern ourselves with the poor and shouldn’t tax them with a sales tax … right? Perhaps, we should remember that those paying with food stamps don’t pay sales taxes. Many reports do not include the value of government benefits received by low income households including rent, subsidized housing and cash income they may receive.

We should also remember that everyone would pay sales tax, except some low income people, and that would include drug lords, criminals and all of those who don’t report all of their income.

(Bob Harper is a Tarboro resident who writes a column of general interest.)

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We Salute...
Each Friday, The Daily Southerner will recognize individuals, groups and businesses in Edgecombe County who have gone “above and beyond” in their effort to make this a better place to work, play and raise a family.

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With much thanks and love …
The past month has been interesting, to say the least.
As I grew up, my first cousins — a group of us that have simply been referred to as “The Cousins” would often joke that when we died, we knew it would be as the result of a heart attack. That’s the history of the Walker family and my Dad and his seven brothers and sisters, as heir parents had, died of heart-related issues.
But along the way, something else happened, Cousins Joyce, Dudley, Don, Kenneth, Howard and Jimmy all died after a courageous battle with cancer.
Dudley and Don and Jimmy and Howard were brothers. But we were much more than cousins. We were a true Southern family in that no matter how far away we might move, we always wound up back at Granny Walker’s.

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May 1, 2013
LETTER TO THE EDITOR
Princeville, the oldest African American community in North America, through the years has had many hurdles and set backs since it was established.Yet with its resilience, it has some how, through some miracles has always bounced back to stay the course of normalcy as best as it could envision. Yet, we must be ever so reminded that our earthly job of being responsible and accountable for and to ourselves shall never cease, until our journey is finished.
This beckoning call for volunteers is being directed to all the local residents who are concerned and aware of the deplorable existing condition of the cemetery on N.C. Highway 111.
This appeal is specifically for churches, community organizations, and all concerned able body men, women and young folks to respond. The purpose of the tentative meeting is to organize a special committee of volunteers within the community, to assumed the responsibilities and duties of maintaining the cemetery. This is where our deceased loved ones are laid to rest and one day for sure some or most of us, if it’s God's will, shall lay rest in this cemetery. It's about pride and cultural respect and decency that we the living owe our beloved ones who's gone over.
Please call or respond to the contact information below and we'll get in touch and arrange a special meeting to start this project. It's no secret that it's an eyesore and a reflection of what we collectively think of ourselves as well as about of our deceased. This mindset can change. With the weather changing, the grass will be growing. Once again we'll be faced with the cosmetic upkeep. There are some simple tasks we as concerned residents can come together as a concerned unit/group to maintain the appearance of our cemetery.
Calling all concerned men and women and children residing in historic Princeville.
Those interested please call (252) 823-3740

Milton Bullock
Native of Princeville

April 17, 2013
LETTER TO THE EDITOR
Dear Editor,
Thursday, May 2, is the National Day of Prayer all over the United States. I would like to challenge every minister of the gospel to bring a group from his or her church and meet us on the Town Square across from Edgecombe County Courthouse at 11:45 p.m. Thursday for prayer and unity.
After looking through the phonebook and newspaper church page, there appears to be more than 300 churches in Edgecombe County of multiple faiths. Yet each year we barely have 25 people respond to the advertising for National Day of Prayer.
Prayer has no respective person and does not practice segregation, yet the church segregates itself every Sunday morning. As a blood bought believer in Jesus Christ, I ask all who believes that Jesus was born of virgin, died on the cross and rose on the third day to meet me with an expressive tongue of prayer for our local, state and national leaders. Are you up for the challenge.

Viola Harris

April 17, 2013
We Salute...
Each Friday, The Daily Southerner will recognize individuals, groups and businesses in Edgecombe County who have gone “above and beyond” in their effort to make this a better place to work, play and raise a family.

April 12, 2013
We Salute...
• ELLIS “BUDDY” HOOKS, on being named to receive the BOY SCOUTS OF AMERICA DISTINGUISHED CITIZEN AWARD.
Hooks will be officially recognized on May 14.
• ALL PARTICIPANTS in the 76th EASTERN CAROLINA 4-H LIVESTOCK SHOW, held this week at the East Carolina Agriculture and Educational Center.
• Members of the TARBORO HIGH BOOSTERS CLUB, employees of the TOWN OF TARBORO, members of the GOLDEN K KIWANIS CLUB and all others involved in the successul staging of the 20th TARBORO EASTER CLASSIC BASEBALL TOURNAMENT, Despite chilly, wet weather on Thursday, today’s weather is forecast to improve to the point of being a perfect day at the ballpark.
• Edgecombe County businesses recognized for their efforts to promote a safe work place, including Keihin Carolina System Technology, Inc., Air System Components, ABB, Inc., Piedmont Natural Gas, Tarboro Resource Center and QVC, Rocky Mount , Edgecombe-Martin County Electric Membership Corp., Hillshire Brands-Sara Lee Bakery and N.C. Department of Commerce, Division of Workforce Solutions, Tarboro Branch Office.
• LT. FLEMING THOMPSON, a 2005graduate of Tarboro High School, on being named the United States Air Force’s 23rd Bomb Squadron NAVIGATOR OF THE YEAR.

• • •

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April 3, 2013
Your Views
To the Editor:
In response to the column by Bob Harper, “Voter ID causing a great flap”, I have a few thoughts to share. This is the first time in my memory that Mr. Harper has written about something being provided free to citizens by the government (IDs for those without one) without stating that nothing is free, and complaining that the cost is taken out his taxes. So enfranchising voters must surely be one cause he is passionate about.

March 27, 2013
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