New Sales Tax an Attack on NC's Working Families
In their latest session, North Carolina's General Assembly expanded the sales tax to several new industries, including auto and appliance repair. While at first this may seem harmless, this new form of taxation actively hurts NC's middle and income families. Sales taxes are decidedly regressive, meaning less wealthy citizens pay a higher percentage of their income in the form of sales tax than the 1-percenters. These new tax laws will only make life harder on the citizens who need tax breaks the most.
This year's General Assembly, like most sessions, was a mixed bag -- some good stuff, some bad.
One disturbing trend, however, is emerging: A conviction among many of our legislators that the way to pay for state government is by nickel- and dime-ing those least able to pay.
A quick check of federal statistics found that most workers earning $30,000 to $40,000 pay about $630 a year for repair and maintenance services. New sales taxes, then, will just about wipe out their income tax cut. If they have a bad year -- say, the family car turns out to be a lemon, or the refrigerator breaks -- they could easily wind up paying more.
As we've pointed out before, most economists consider the sales tax to be regressive. That means it hits harder on poorer citizens, who tend to squander their money on food, rent and children's shoes, than it does on the wealthier ones, who save, invest and sometimes contribute to legislators' campaigns.
As one commentator pointed out, better-off drivers tend to trade in their cars every two or three years. The less well off hold on to their transportation and pay to keep it fixed and patched.
The Republicans who passed these increases often talk about their devotion to the small businessman (or woman). Yet all these extra sales taxes will mean extra paperwork and expense for small garages, self-employed mechanics, small veterinary clinics and other non-corporate entrepreneurs.