Dumb taxes or smart taxes

Aug 01, 2014

Aug. 1-3, 2014, would have been the tax free weekend for North Carolina had it not been eliminated last year by the state General Assembly.  Wonder how many families are headed to Tennessee or South Carolina or Georgia for their tax free weekends?  Add that to the gasoline tax for each state and you are left scratching your head trying to figure out what our state elected officials are doing?

Why would they eliminate the back-to-school tax free weekend at the same time they decreased the sales tax and increased the fuel tax.  If I didn't know better, I say they were not just trying to run off public school folks.  It appears as if the major of state legislative officials are trying to run off everyone.  Okay, that is a little overstated.  You have to admit, a lot of the stuff coming out of the state General Assembly is counterintuitive.

If bordering states have improved their economies with higher sales tax and lower fuel taxes, why did our state do the exact opposite in 2013?  I have asked this question to liberals and conservatives.  No one can give me a reasonable answer.  I’m not looking for political rhetoric; just a logical reason for why the sales tax was decreased and the ridiculously high fuel tax was increased even more.  Here is some factual background from taxfoundation.org and taxadmin.org for 2014.

 

State

NC Sales Tax

Income Tax

Gas Per Gallon

Diesel Per Gallon

NC

6.9%

5.8%

37.75 cents

37.75 cents

TN

9.45%

0%

21.4 cents

18.4 cents

SC

7.19%

0% to 7%

16.75 cents

16.75 cents

GA

6.97%

1% to 6%

19.3 cents

21.3 cents

 

This column is about taxing smart, not more tax or less tax.  The NC General Assembly decreased the sales tax and increased the already outrageously high fuel tax.  That makes no sense (or cents).  If fuel taxes are low, poor folks can drive to work and business owners can be more productive and profitable.  Isn’t that what we want?  Just imagine what could happen if we all paid ten or fifteen cents less per gallon for fuel.  Decreases in fuel tax revenues could be covered by increased business productivity, more individual discretionary spending from the fuel tax savings and a return to the previous sales tax.  Since we must have some taxes, let’s at least have taxes that are smart and make common sense.

 

 

 

Comments (2)
Posted by: Scott Lilly | Aug 01, 2014 15:21

Hey!  I'm all in for smart taxes.  So the proposed idea is to reduce fuel tax and increase sales tax?  And that is better because poor people drive more and spend less?

 

I would suggest that sales taxes have requirements to be shared with county and town governments for spending.  Fuel taxes likely don't have that kind of restriction and likely are "more controllable" from Raleigh.  I found this:

 

http://www.johnlocke.org/agenda2012/1i-gastaxallocation.html

 

I like the idea of fuel taxes only going to roads.  Which would mean more cuts or increasing other taxes -- like the sales tax.



Posted by: Charles Zimmerman | Aug 02, 2014 10:36

            I paid Highway Use Tax of $550.00/year for my semi for many years. Exempt for other farm trucks. This was a dedicated use tax in that it was to be used only for OUR highways. "rayguns" administration changed all that and ended designated use of OUR taxes altogether. Large trucking companies lobbied Congress and got Highway use tax eliminated. This has caused a great reduction in available revenue to fix OUR roads with no increase in taxes to compensate.

                    My solution is very simple. A tax needs to be assessed on all miles traveled on all vehicles on a pro-rated basis. Size, weight, axles, etc, should be considered. Along with fuel taxes.

                     If you use it you need to pay for it.

 

                     C.Z.



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