Is neither new nor wise:
Rucho, one of the legislature's leading voices on tax policy, argues the state needs to raise more revenue with taxes akin to HDL cholesterol, which helps keeps the arteries of commerce clear and cash flowing through the economy. "If you want to achieve economic growth, you want to pick the best taxes that will allow you to grow your economy," Rucho said.
As I've mentioned before, 74% of NC businesses employ 10 people or less. The vast majority of those (truly) small businesses provide services (as opposed to products), such as landscaping, HVAC repair, haircuts, etc. And they're now coming into the crosshairs of Republicans like Rucho who want to ease the tax burden on their wealthy patrons.
Taxing (many more) services a bad idea on several levels, but we'll focus on the micro for now. Not only do these small businesses have a short list of employees, they also have a short list of clients. Any increase in the cost of their services will either have to be absorbed by the provider or passed on to the customer, either of which could spell doom for many of these businesses.
It can take years to build a client base, especially in low-population areas, and quite often the economic fabric of an entire rural community can come apart with the removal of only a few threads.
Here are a few other thoughts to mull on:
For brick and mortar operations that can’t move out of state, like barbershops, nail salons and taxi drivers, the increased cost will affect the bottom line of their already thin margins. In the competitive environment that is commerce and business, smaller companies may not want to pass the extra expense of service tax onto their consumers.
Small business would be at a competitive disadvantage compared to large outfits. Smaller businesses often use outside providers such as accountants or computer programmers for many services and would have to pay taxes on these services. A large business can perform these activities in-house to avoid the taxes.
The more I observe the behavior of Republicans, the more I see there is a huge difference between being "business-friendly" and "small-business-friendly". I honestly think they don't understand how critical small businesses are; not just to our economy, but our social structure, as well. The evidence is there for anyone to see: in areas where small businesses fail, everything else fails, too.
Those who say small businesses can absorb such an added cost and (somehow) benefit from it don't know what they're talking about. Legislators went on a state-wide fact-finding tour about regulatory reform and, before they burden small businesses with these taxes, they need to do another fact-finding trip. And this time, leave the big-money corporate mouthpieces behind.
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