@NCCapitol

@NCCapitol

McCrory still open to dumping state income tax

Posted January 24, 2013

— Despite the reservations of his budget director, Gov. Pat McCrory said Thursday that he still wants to look at the possibility of eliminating North Carolina's income tax.

Republican Senate leaders have proposed replacing the personal and corporate income tax with an increase to the state sales tax rate, which would then be applied to a broader array of goods and services, from groceries to haircuts to car repairs.

Raleigh businessman Art Pope, whom McCrory appointed to oversee his budget proposals, said Wednesday that he has "great concerns" about trading income taxes for sales taxes. He called the idea "regressive" and said it would unfairly burden senior citizens.

McCrory said the idea remains on the table, though, as he and lawmakers work through plans to reform the state's tax code.

"We're looking at many different plans at this point in time, and then, after reviewing all the different plans, I'm going to try to make the best decision possible," he said. "At a minimum, I want to be competitive with my neighboring states, but I've also got to be realistic about what we can and cannot implement."

A study released Wednesday by the left-leaning NC Budget and Tax Center said the plan would mean lower taxes for the wealthiest taxpayers and an increase for low-income people.

North Carolina Sales Tax Study by Reaganomics architect basis for income tax plan

"It's not reform. It really is a huge tax shift, asking more from 60 percent of taxpayers while we provide the top 20 percent with a tax cut," said Alexandra Sirota, director of the Budget and Tax Center.

Ironically, the Senate leaders are basing their plan on a study paid for by conservative think tank Civitas Institute, which is backed by money from Pope's family foundation. The study was authored by economist Arthur Laffer, who was the architect of Reaganomics in the 1980s.

A report from the nonpartisan Institute on Taxation and Economic Policy says Laffer’s study relies on an economic analysis that is too methodologically flawed to even be useful, and Sirota said most mainstream economists now agree that the trickle-down theory doesn't work in real life.

"It would be a serious concern if we make policies based on theories that in practice aren't working," she said.

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  • foxtrot69 Jan 26, 12:44 p.m.

    Typical republican! Only interested in benefiting the rich and making life harder, if not altogether impossible, for the common citizen!

  • ncrph08 Jan 25, 5:59 p.m.

    I am also pretty sure that most lower income people do not buy their groceries from Whole Foods, etc. I doubt they buy more expensive organic groceries whereas the likelyhood of the upper class people buying those items is higher. I know before I graduated college, I ate what I could afford. Lots of chicken and hamburger and mac-n-cheese. If you can't afford to eat like a king, don't.

  • ncrph08 Jan 25, 5:44 p.m.

    No, they dont. Most lower to upper middle class people purchase the name brands. Most of us (so-called) rich folk purchase the less expensive items. What world do you live in? I will shop for the best bargin I can find in every case. All of my closest friends do the same. We live in modest homes, and also drive modest cars for the most part. stormtrooper76

    As I said, those in the lower-middle class will have to start living within their means. If that means start buying store brand groceries and such if they don't already do that then they will have to. I also search for the best bargains I can find and live in a modest home.

  • stormtrooper76 Jan 25, 4:54 p.m.

    This makes perfect sense to me. The richer buy more names brand item hence more expensive items, hence more sales tax.
    ncrph08

    No, they dont. Most lower to upper middle class people purchase the name brands. Most of us (so-called) rich folk purchase the less expensive items. What world do you live in? I will shop for the best bargin I can find in every case. All of my closest friends do the same. We live in modest homes, and also drive modest cars for the most part.

  • stormtrooper76 Jan 25, 4:48 p.m.

    Art Pope even states that this will shift the tax burden to the lower and middle class.

    Why cant some of you ideologs see it? Oh, I know why; because you refuse too......... You would rather push a failing agenda that doesnt work in the real world.

  • stormtrooper76 Jan 25, 4:43 p.m.

    A report from the nonpartisan Institute on Taxation and Economic Policy says Laffer’s study relies on an economic analysis that is too methodologically flawed to even be useful, and Sirota said most mainstream economists now agree that the trickle-down theory doesn't work in real life.

    "It would be a serious concern if we make policies based on theories that in practice aren't working," she said.

    Laffer Firm Report = trash economics that doesnt work

  • ncrph08 Jan 25, 4:17 p.m.

    This makes perfect sense to me. The richer buy more names brand item hence more expensive items, hence more sales tax. The lower-middle class buy store brand items that cost lest hence less sales tax. How is this not fair? This also may help fix some of the fraud with food stamps. People may not be as quick to sell those food stamps to go get their hair/nails/car wheels done because they will actually need the amount they get each month to buy groceries! Isn't that a novel idea. It amazes me the amount of money on those EBT cards for a family of 4. I feed mind for a lot less than that! Lower-middle class will have to learn to live within their means. I don't understand what is so difficult about this.

  • Crumps Br0ther Jan 25, 12:06 p.m.

    All of you whining about the rich and voted for Barry because he would teach those evil ol rich people a lesson need to look at Barry's new choice for secretary of state. One of the richest men in politics who docked his boat outside his own state so he wouldnt have to pay taxes on it! But as usual its different when a rich liberal does it, right?

  • Crumps Br0ther Jan 25, 12:02 p.m.

    Actually those are "reagan phones" because the program started under him and expanded to cell phones under W.
    Nope

    Remember that everytime you say Republicans don't care about the poor.

  • lessismore Jan 25, 12:00 p.m.

    Amazing, those on welfare want to write tax laws and decide who should pay for their livelihood.

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