@NCCapitol

@NCCapitol

Higher taxes on food, services could replace NC income tax

Posted January 17, 2013

Money generic, dollars

— Republican legislative leaders are crafting a package of changes to North Carolina's tax code that they say will stimulate economic growth, including slapping a 6 percent sales tax on groceries.

Lawmakers phased out the state sales tax on food in the late 1990s, saying that scrapping the 4 percent tax would give low-income families a needed break. Counties continue to collect a 2 percent food tax.

The GOP, which now controls the General Assembly, is pushing to lower the individual and corporate income tax and use a higher state sales tax applied to more things to make up for the lost income tax revenue. Food should be taxed, they say, because grocery spending is dependable.

Senate President Pro Tem Phil Berger said Wednesday that the state's current tax model dates to the 1930s and doesn't really fit to North Carolina's changing economy. So, tax reform is critical to the state's future.

"It's important for us in terms of our competitive posture with other states," he said. "It's important for us in terms of making sure we have a fair allocation of the cost of government across the spectrum of economic activity."

Details of the tax reform package are likely to be rolled out later this month, but the prospect of a higher sales tax on food already leaves many shoppers with a bad taste in their mouths.

Supermarket, grocery store generic Food tax opponents say poor will suffer

"Food is high enough now. Everything is taxed – taxes here, taxes there," Phyllis Branch said Thursday. "We've got to eat, so they kind of got us in a bind."

Raising the sales tax on food from 2 percent to 8 percent would add $312 to the annual grocery bill for someone who spends $100 a week on food at the supermarket.

"It's not a progressive tax, where those at the higher end pay more and those at the lower end pay less," said Bill Rowe, general counsel and director of advocacy for the left-leaning North Carolina Budget and Tax Center. "Everybody's paying the same amount, and so, if you're of modest means, you're going to be paying a lot more in taxes that way."

Republican lawmakers contend that those costs will be offset by lower income taxes. Rowe notes, however, that many low-income families don't owe any state income tax, so they won't benefit from a cut.

"It just really appears to be making up for cuts for folks at the higher end and corporations, which really does strike me as being a very unfair way to go," Rowe said.

490 Comments

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  • lilgtogirl Jan 26, 11:51 p.m.

    lusikka Texas also has more poverty. See, when you tax food, that hits the poorest people the most, making them poorer. Isn't NC becoming like the third world enough as it is? This is only a tax break for the wealthy.

  • Kegger Jan 26, 7:11 p.m.

    Texas has no state income tax..
    But they don’t have teachers.. wait they do
    But they don’t have roads.. wait they do
    But they don’t have police.. wait they do
    They have everything and a surplus budget
    The way WRAL puts the headline makes people think its evil

  • southerntalent Jan 24, 5:45 p.m.

    Wonder how much tax money NC would lose to people who would cross the borders to shop for food and only shop once a month and make bigger purchases.

  • ConservativeVoter Jan 24, 1:27 p.m.

    Only people this plan hurts are the takers don't currently pay state income taxes. For all of the workers, the increase in sales tax is much less than what they currently pay in state income taxes.

    Time for us to quit taking care of the takers who pay almost no taxes and start taking care of the workers who currently pay most of our taxes.

  • killerkestrel Jan 24, 11:50 a.m.

    Wish I made enough to pay income tax. Guess the working poor will continue to have to pay more while making less.

  • mcaldwell4 Jan 23, 2:58 p.m.

    I personally think this is a great idea. Between the property taxes, personal property taxes, personal state income tax, and HOA fees NC is not a very reasonable place to live. My company relocated me here 10 years ago and gave me a raise. The raise was more than consumed by NC personal state income tax. I am now looking to move to Florida or Tennessee where I can save $8000+ per year. When you have a family $8000.00 is a lot of money per year to leave on the table. If they do not pass this legislation...I'm outta here!!! I know a lot of other folks that feel the same way as I do and are considering a move.

  • bawolf887 Jan 22, 10:30 p.m.

    Stop all social programs: quit pretending we're a "MORAL" society. Tax consumption only, the poor have to eat, so we'll get theirs. Tax medicine and medical procedures, the sick have to pay their fair share too. Let's also be sure to tax rent and home sales at the same rate as all else. While we're at it, turn the prison system into a for profit institution: let business bid for cheap labor, what better way to stimulate growth than having a cheap captive labor force for business to draw on. As for the gas tax, leave it alone since it is a consumption tax, but I really think we ought to have an additional mileage tax collected as part of annual inspection. People that drive fuel efficient cars aren't paying their fair share for the highways. People that have gardens at home need to be taxed for their consumption of sunshine and C02 as well. Hunters need to pay by the pound for their carcasses. Can't have people avoiding their food taxes by hunting.

  • quilting bee Jan 21, 11:08 a.m.

    To those who think that the GOP will eliminate the personal income tax, please read the article more closely. "The GOP, which now controls the General Assembly, is pushing to lower the individual and corporate income tax and use a higher state sales tax applied to more things to make up for the lost income tax revenue." People with lower incomes will be paying a proportional higher part of their income than well-off individuals. Corporations are winners because taxes on food are an operating expense to be deducted and they will have lower tax rates overall. This is very unbalanced against the middle and lower class.

  • goncampn2 Jan 19, 2:33 p.m.

    elcid liked Ike:...You are soooo funny! I love people like you who just spout off thinking you know everything. I like how you tried to qouote what I posted but but a typical "progressive" that you are you only chose parts of the quote to make yourself look "intelligent" again...read the book!!!!!

  • freemansenterprizes Jan 19, 12:36 a.m.

    The GOP, which now controls the General Assembly, is pushing to lower the individual and corporate income tax and use a higher state sales tax applied to more things to make up for the lost income tax revenue. Food should be taxed, they say, because grocery spending is dependable.
    Republican lawmakers contend that those costs will be offset by lower income taxes. Rowe notes, however, that many low-income families don't owe any state income tax, so they won't benefit from a cut.
    "It just really appears to be making up for cuts for folks at the higher end and corporations, which really does strike me as being a very unfair way to go," Rowe said.
    So in sort reduce the tax burden on those with taxable income, and take it from those that have no taxable income, and force more of them to more government funded assistance, dyeing, or into desperation and stealing.

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