Prospect of broader NC sales tax raises concerns
Posted April 4, 2013
Updated April 5, 2013
Raleigh, N.C. — Republican legislators have vowed to overhaul North Carolina's tax system this session, and the prospect of applying the sales tax to more things is already generating opposition.
Realtors, for example, have started an online campaign warning of the cost of blanket tax reform.
"Imagine selling your home and being forced to pay an 8 percent tax to the Realtor, an 8 percent tax to the attorney and an 8 percent tax to the appraiser," an online commercial states.
Last year, the state brought in more than $10 billion from personal income taxes, $1 billion in corporate income taxes and $5 billion in sales and use taxes.
Sen. Bob Rucho, R-Mecklenburg, who is leading the tax reform movement, has suggested eliminating state income tax, which would mean sales tax revenue would have to fill the gap.
"In the past, two-thirds of all dollars that were spent went for tangible items – goods. Today, it's two-thirds on services," Rucho said Thursday.
Ideas have been floated in recent weeks to tax everything from haircuts to auto repairs to legal services.
"There are a lot of entities out there that say, 'I've been given a loophole' or 'I've been given a tax preference, and I expect it because it's mine,'" Rucho said. "Well, guess what, everybody else has to pay."
Chris Fitzsimon, director of the left-leaning N.C. Policy Watch, said he fears that using the sales tax to eliminate income taxes will shift the tax burden in North Carolina to the poorest residents.
"The politics of this are incredibly complicated," Fitzsimon said. "The devil in every piece of legislation is in the details. Here, the devil is overwhelming."
Many people, however, said they welcome the idea of tax reform.
"It's good. I'm a small-government guy," Matt Granberry said.
"It's kind of a fair thing for everyone, instead of just getting taxed for things you don't use," Elaine Park said.