The follies of the radical Senate tax shift

By Chris Fitzsimon | May 10, 2013

If Senate President Pro Tem Phil Berger and his colleagues in the Senate get their way, you will pay more for bread and milk at the grocery store and the cost of a getting a haircut and having the brakes on your car repaired will increase too.

That's a key part of the Senate GOP tax proposal released this week, to expand the state sales tax base by applying it to food, non-prescription drugs, and dozens of services that are currently not taxed.

The state revenue that Berger's plan would raise by forcing you to pay more for food and haircuts wouldn't go to make the tax system less regressive overall or increase teacher pay or provide health care to people who can't afford it.

In fact, Berger's tax scheme would actually mean more budget cuts to schools, human services and environmental protections by reducing state revenues by a billion dollars. That's roughly the budget of the entire community college system.

The extra money you will pay for a loaf of bread or to get your car battery replaced will help pay for a $56,000 tax cut for millionaires. A married couple with three kids earning $40,000 would see a tax increase under the plan of more $600.

And those amounts are not guesses. They come from the tax calculator on the website created to sell the startlingly regressive Senate tax shift. The site also includes a campaign-style video starring Berger, a possible candidate for the U.S. Senate in 2014, walking and talking in what appears to be a factory or warehouse with animation of tax facts and charts appearing over his shoulder.

The political commercial was released Monday night. Tuesday Berger and his key lieutenants met with reporters to talk about the plan but they didn't provide many more details, just more rhetoric

It's not clear when an actual bill will be filed and judging from the less than enthusiastic reaction from other key state leaders, it may not matter.

Neither Governor Pat McCrory nor House Speaker Thom Tillis seems thrilled with the plan, both issuing bland statements effectively calling it a first step toward tax reform, though it's no secret inside the legislative building that they consider it more of a misstep than a serious proposal.

The plan also prompted immediate and widespread criticism from likely and unlikely places. Even the head of Raleigh's leading conservative think tank believes Berger's plan is too regressive.

 

Chris Fitzsimon writes for NC Policy Watch, a project of the North Carolina Justice Center.

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