A progressive alternative to Art Pope's destructive tax reform plan

I understand the instinct that many Republican electeds may have for doing something radical about taxes. After a long drought of being powerless, Governor Pope has given them the whole government as their playground, and there are no teachers around to monitor their activities. They'll make whatever messes they want, by god, and there will always be some poor schmuck without a job to come around and clean it up.

That said, I'm hoping there may be at least some members of the Show who are willing to take a step back from Pope's disastrous tax reform plan and ask themselves, just what the hell are we doing?
More to the point, I'm hoping those members will consider having an honest debate about another radical proposal (below) that would actually accomplish their goal of stabilizing North Carolina's economy, attracting business, and fairly addressing the needs for public services and infrastructure.

As Steve Harrison has noted on our front page today, Pope's plan moves the tax burden from income to consumption, resulting in a clear transfer of wealth from poor people to rich people. This fact is not debatable. Yes, the resulting system would be less complicated, but it also shifts the burden of revenue management to hundreds of thousands of businesses throughout the state. What's more, it will drive consumers to purchase goods and services from other states with lower consumption taxes.

For comparison purposes, here are the states that have no income tax.

There is, however, an even simpler and more elegant alternative to the Berger plan. It is the approach that has been adopted in states with no sales tax.

Of special interest to me is the fact that Oregon is a state that benefits enormously from having no consumption tax. Arguably one of the most progressive and enlightened states in the nation, I see Oregon as a state North Carolina could well benefit from emulating.

The same is true for Delaware, which is a magnet for consumers from surrounding states. Bordered by Maryland, New Jersey and Pennsylvania, the same is true for Delaware, which is a magnet for consumers in surrounding states. Just like South Carolina, Virginia, and Tennessee will benefit from higher consumption taxes in North Carolina. Charlotte retailers, car dealers, and other service providers will most assuredly find themselves sucking wind.

Which brings me to Plan B.

  1. Reduce the sales/consumption tax to zero across the board.
  2. Take businesses out of the hot seat when it comes to managing tax revenues.
  3. Eliminate the corporate income tax.
  4. Expand the state income tax structure with an additional bracket at the top for those earning more than $400,000 annually.
  5. Eliminate all deductions on state income taxes. No one will ever need a tax accountant to complete the simple short form that would remain in place.
  6. Tax dividends and investment income as ordinary income at the state level.

I can't imagine that there is a Republican legislator with the spine to cross Art Pope when it comes to challenging his reverse-Robin-Hood plan. But if there is one, he or she should at least put on the table the alternative proposed here.

As always, I'm not holding my breath.

Comments

Other alternatives

The Justice Center has worked on this issues for years and has produced a number of strong alternatives. And, of course, the devil is always in the details.

But before you get to details, a philosophical framework is needed. Which raises only one question: Who got it right? Robin Hood or the Pope of Nottingham?

Part of the goal is to disable government by defunding agencies

Pope's grand plan is to continue that trend. The math indicates the Pope plan cannot retire the debts nor fund governance adequately. Crisis oriented budgets never do.

The question is how to embarrass them by showing how much money now collected would be lost by Pope's change. The idea that they are throwing away income which would help retire the debt needs to be hammered home to the voters who put them in office.

Pope et al have removed any incentive to think about the long or even short term public consequences. There is no room to consider that business does not yet pay an appropriate and fair share nor how that might be balanced.

As the party on the outside for so long they have no vision of constructive reform. They got into office by inaccurately attacking the system as broken and in need of complete replacement. Now they expect that vision to define policy. Vultures do nothing but consume.

While I hope for the enlightenment of my republican neighbors as they watch the disaster unfold I fear those newly in office have no ability to see anything but what destroys the system they have blamed for years.

Right you are

... it also happens to be the system that employs a host of Pope's government-hating lackeys.

Pope's clowns (McCrory included) are just fine taking a government paycheck ... it's all those "other" people who should get a real job.

...while we play another round of "Blame the Victim".

"... it's all those "other" people who should get a real job."

Yes lets do, at 1/3 the pay, that is if one can be found.

Pot of gold

Dear Governor Pope.

If you are serious about resetting budget priorities, why isn't your Libertarian alter-ego pushing through reform on drug policy?

Ending the war on drugs in North Carolina (and bringing in revenues from related profits for business owners) would swing the state's budget a half a billion dollars in the right direction.

What's the problem, sir? What are you afraid of? The mean old federal government? That didn't stop you from fighting against health reform.

You're so full of shit.

Your friend,

James