Internal Revenuer-in-chief Hood makes the case for North Carolina dropping its eternal — and infernal — efforts to “reform” its sales tax and instead implement a broad, flat consumption tax to be the primary source of revenue for the state. But I think you could, should and maybe have to go even further in revamping the tax code.
Given all the “local option” sales taxes written into state law, I think you’d have to provide for counties collecting some subset of the state consumed income tax liability. Just guessing — although you’d start with the notion that the local consumed income tax should be revenue neutral compared to the retail sales taxes it replaces — that might mean that every county collects an additional 20 percent of state liability. Counties who have opted to impose additional dedicated sales tax levies — I’m looking at you Mecklenburg — would collect, who knows, 2, 3, 5 percent more.
The point is, very much like the ABC system reform matter, the counties will never give up what they perceive to be “their” taxes unless they are replaced with something. I’m sure that power-players like state Sen. Dan Clodfelter know this to be true — as he doubtless knows that the state — and local — revenue system is broken and in need of a do-over.
