By CHRIS FITZSIMON
N.C. Policy Center
spring when a single mother in Newton takes her old car to the Jiffy
Lube for an oil change, she will be in for quite a surprise. It is
going to cost her 6.75 percent more, thanks to the budget passed by the
House and Senate and signed by Gov. Pat McCrory that for the first time
imposes a sales tax on car repairs and services.
she returns home to find that her washing machine isn’t working, it’s
going to cost her more to have it fixed. The budget applies the sales
tax to appliance repairs too.
she somehow scrapes the money together to buy a new washer instead, she
better pick it up herself as it will cost her more to have it
delivered. The budget adds the sales tax to deliveries.
she may also be surprised to learn that none of the extra money she
will have to pay to fix her car or washing machine will stay in her
county to help her daughter’s school or improve the local roads.
it will go to another county in the state as part of a scheme inserted
into the final budget agreement that expands the sales tax to a host of
commonly used services with the proceeds directed to a special fund
that benefits 79 counties, while 21 mostly urban and tourist counties
not only will folks in Newton in Catawba County pay higher taxes and
see none of the benefits, so will folks in places like Brunswick County
and Cabarrus County and Dare County, as well as Durham and
Winston-Salem and Charlotte.
in the state will pay more the next time they have their shoes resoled
or their flat tire fixed. And the majority of the people who pay the
extra tax will not see it go to improve their local communities.
this month, Gov. Pat McCrory said of the expansion of the sales tax to
services, “A tax increase on small business is not good for the
hard-working men and women of the state,” and he sharply criticized
lawmakers for inserting the scheme into the final budget agreement.
comments prompted speculation that McCrory might veto the budget, but
he signed it last Friday, apparently no longer troubled by raising
taxes on low-income families.
of the new sales tax plan claim that it is not a tax increase, that it
will be offset by a reduction in the personal income tax rate. But
that’s not true for the folks at the bottom of the economic ladder who
will receive very little, if anything, from the income tax cut.
Millionaires by the way will receive a $2,000 break and that’s on top of the windfall they received in the 2013 tax cut package.
Low income folks won’t be so lucky.
might be wondering how this regressive tax scheme passed the General
Assembly and what people said it about it as it made its way through
the legislative process.
never went through any committee. It appeared out of nowhere in the
final budget agreement and questions about the formula and how to
distribute the money in future years were not answered.
to restore the state Earned Income Tax Credit to help low-wage workers
and their families that could offset a sales tax hike have also been
are plenty of reasons why the budget passed by House and Senate leaders
last week takes North Carolina in the wrong direction.
One big one is that it raises taxes on people who can least afford to pay more. McCrory was right the first time.
bad he didn’t stick to his guns and veto the budget and prevent that
single mother and thousands of other struggling families from paying
more to keep their cars on the road and their washing machines working.
Too bad he didn’t stand up for them instead of the millionaires.
Fitzsimon is the Executive Director at N.C. Policy Watch. NC Policy
Watch is a progressive, nonprofit and non-partisan public policy
organization and news outlet dedicated to informing elected
officials as they debate important issues and, ultimately, to improving
the quality of life for all North Carolinians. Read more commentary at www.ncpolicywatch.com.)