So after months of negotiations, state Democratic lawmakers today agreed on a plan: raise taxes by nearly $1 billion to avoid further spending cuts in the state budget -- and do it in a way that hits everyone.
The plan raises taxes by $982 million by hiking the sales tax rate by a penny, adding a 2 percent "surcharge" to state income tax bills and imposing small tax increases on cigarettes (10 cents a pack) and alcohol (about a nickel a six-pack, and 5 percent on liquor).
The plan is badly flawed. It hikes taxes on everyone, including hitting the poor disproportionately, while doing little to address the problems that got us into this situation in the first place. It relies on the same taxes that, this crisis shows, fluctuate too wildly to be a reliable revenue structure for a growing state.
Lawmakers should have cut the income tax rate, not put a surcharge on it. They should have cut the sales tax rate, not increase it. They should have closed loopholes on business taxes. And they should have applied the lower sales tax to more services.
Senate Democrats have been pushing to overhaul the tax system. But it appears the House put doing the right thing on the back burner and just relied on the higher taxes they could get passed.
Which means, we'll be in a budget mess even after this passes. And if you think some of these increases will be "temporary," you haven't been paying attention.
- Posted by Taylor Batten
We're a relatively low-tax state, and I don't see much fat to cut. The budget has to balance in states (too bad the Feds don't have the same restrictions). Stop b**ching and be glad you're not in California!
ReplyDeleteLow tax state? Where have you been? We are the highest taxed state in the south, in the top 10 in the nation. Yet are schools stink, out roads are terrible and crime is at an all time high because we don't have enough prisons, which Perdue has made sure that we close more of them. The problem here is that they will not remove these taxes when good times come back. They will jusdt find some other petty program to support to waste these additional taxes. Please pull youhead out of the ground. Remember, the main purpose of state goverment is to provide safety, education, commerce and roads. Not give away our money stadiums, special groups of people, etc. Please North carolinians, stop them before it is too late.
ReplyDeleteGrayisland - the fact is NC has the highest overall tax burden in the Southeast before this increase. You are correct it isn't as high as CA but that is nothing to be proud of. There is no reason our taxes are higher than VA and GA which have similar demographics and get more from their money than NC. I'm not including SC(different income demographics) or FL/TN (no state income tax) but for you to basically say we are low-tax is just not true. The tax structure needs to be reformed to raise the current level of income and better promote growth or you WILL see businesses and high net worth individuals move out of state (just as CA and NY about that).
ReplyDeleteyou bunch of idiots that pulled the democrat lever should have known this was coming. The democrats know nothing about balancing anything, the only thing they know how to do is spend, spend and spend. I will do all of my purchasing in South Carolina and cant wait to move out of this hole!
ReplyDeleteThe last 8 years of blind spending (typically characteristic of the dems but not this time) by the Republican Party and the mighty Bush has put us where we are. Tax cuts and massive spending on Republicans is too blame not a gov. or pres. who have only been in office for 6 months
ReplyDeleteMaybe it time for the state to cut all state employ's by 10% they are over paid now
ReplyDeleteNot all state employees are overpaid! Most are underpaid considering what they could be making in the private sector. Now it is true that the higher ranking officials may make more than they should. To punish all state employees because of a few is rediculous. I dont really care what they do, but they need to leave the educators alone, they are providing a service to our children and they need to beef up the emergency staff (police, fire, EMT, ect.)
ReplyDeleteThere are many ways to balance the budget. When my budget is out of balance, I have to cut costs. Sometimes it is painful, but the state should start with looking at what it can save, not how it can further raise already high taxes. That is a sure way to discourage companies from bringing new jobs to our growing unemployed!
ReplyDeleteIll be spending my money in SC... Good job NC!
ReplyDeleteYou're going to spend your money in SC? Well, you're one of the few. They're economy and infastructure is in a lot worse shape than NC's. There are plenty of places to cut, just look at yesterday's article about UNC-Chapel Hill. But, we're still a much more enticing place to live than most of our neighbors.
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