Tax ‘reform’ comes up short

December 12, 2013

North Carolina’s expansion of the sales tax to include professional and college sporting events, museums and other arts and entertainment outlets makes a lot of sense.

After all, these sorts of leisure activities are optional and use our discretionary income; while quality of life shouldn’t be taken down to the basics of access to food and water, perhaps, it is worthy of mentioning these things only enhance that quality.

In Richmond County, facilities are split between the three options to them: pass the tax along to the consumer, as Cole Auditorium will do; absorb the cost, as The Rankin Museum of American Heritage in Ellerbe expects; and taking a wait-and-see approach, as Discovery Place KIDS intends.

Hopefully, student field trips and the like won’t suffer; perhaps the cost can be at least partially absorbed or tickets discounted in order to offset the cost of the sales tax.

We believe this is year, little by little, people can begin to pay a fair share. Yes, they already do. Of that there is little doubt. But when we looked for the idea behind excluding the arts and entertainment venues from sales tax in the first place, there seemed to be no clear response other than perhaps a strong lobbyist behind them.

To that end, we wonder how other services escaped the sales tax expansion. In May, the Associates Press reported that North Carolina, prior to the legislative session, taxed about 30 services. The original Republican proposed would tax another 100-plus services.

To think of it as a tax increase is one way to look at it; another, more prudent way is that to consider that the tax cuts that have long been in place are now lifted.

The tax system in North Carolina, like anywhere else, begs more questions than it provides answers and, at the end of the day, leaves a lot to be desired.

Of course, that only addresses part of the problem. A top concern is that the sales tax expansion was coupled with corporate income tax cuts. At the end of it all is the bottom line: the Budget & Tax Center anticipates the burden state’s tax reform measures will be shouldered by 80 percent of taxpayers. Meanwhile, the wealthiest 5 percent will enjoy the income tax savings.

Something about that doesn’t sit well with us at all. We’re hopeful our legislation delegation to Raleigh will continue to work and make the tax system a fairer one.