Durham County needs to raise some revenues. The two options are a sales tax increase of a quarter-percent or a land-transfer tax of 0.4%. The N&O covers the topic in depth here.
So here’s my two cents… Maybe I’m wholly impractical and naive, but having the county manager Mike Ruffin advocate the regressive tax over the progressive tax simply because he’s scared of realtors gives me 0% confidence in my government to do the work of the people.
A sales tax is easy because everyone expects it and few people notice the difference between 6.75% and 7.00% and 7.25%. Unfortunately, sales tax really dicks over poor people. I’m talking out of my rear right now, but, for what’s it’s worth, I’m trying to do it skillfully. Say the household of I.M. Poor earns $24,000 a year, or $2,000 a month. They spend $500 (or 25%) on consumable, taxable goods. Say the sales tax is 6%. They’ve just paid $30 in sales tax for the month.
The household of Ima Doctor earns $240,000 a year, or $20,000 a month. They don’t need to spend every penny every month to live comfortably. They live on $10,000 a month, and say 30% of it is on consumable, taxable goods. They’ve just paid $180 in sales tax for the month.
I.M. Poor’s household sees 1.5% of its income go towards paying sales tax.
Ima Doctor’s household sees just 0.9% of its income go towards paying sales tax.
(If an economist or more-learned persons wants to fine-tune the figures in this example, go right ahead).
Ima Doctor: Why should I be penalized for making a lot of money?
Ima, congratulations on the success you’ve achieved, regardless of whether it was achieved through hard work or through Dad paying for medical school and the downpayment on your house. You’ve done well, and your government simply asks that you carry a little bit more of the burden for those among us who don’t do so well–your nurses, your gardeners, your kids’ teachers, your 911 operators, your local IT professionals…
Anyway, it comes back to your basic philosophies about the roles of government and its citizens. I feel the same way about our North Carolina “Education” Lottery, by the way. It’s just a tax on poor people, an insulting, manipulative tax on those who have the most trouble making ends meet. Or if you’re gonna have a gambling tax, at least let us legally play poker and tax that!
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Kevin describes the issue in depth at Bull City Rising
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