Bundled up in Monday night’s revelation that the city of Charlotte has a half-cent public safety tax was an altogether absurd claim regarding how much the half-cent sales tax costs city residents. In a series of slides declared “Facts” by Pam Syfert was a calculation that the median household in Charlotte pays $39 a year to CATS.
This is ridiculously too low.
Charlotte has about 260,000 households. If we figure that each and everyone of them pays $40 a year in half-cent tax — and median just means that there are 130,000 numbers below $39 and 130,000 above it — we get a revenue number of $10.5 million a year.
You cannot get to the $70 million a year the tax manifestly raises from there. Even after you assume, as Mayor Pat McCrory does, that 30 percent of the $70 million comes from outside Mecklenburg County — and by definition outside Charlotte — leaving you with about $50 million a year from inside the county, $40 or even $50 a year from Charlotte households cannot get you there.
What can? If you start with the 300,000 or so households in the county you get an average of $166 per year per household to raise $50 million. That tells us right away that the city’s 260,000 households have to be throwing off more than $10, $15, or even $20 million in half-cent revenue.
Syfert had her crew ignore this. The city is leaving the end revenue number out of their calculations while trying to “model” the spending habits of a household earning a median income of $56,000 a year in Charlotte. OK. First, a household is about 2.5 people in Charlotte, keep that in mind.
Other important bit is that $39 is .5 percent of $7800, meaning that the household must spend up to $7800 on half-cent taxable items a year. Weekly that is $150 or about $60 per person in half-cent taxable spending. Doesn’t tell you much, does it?
Try this. The city is saying the median household in Charlotte spends 75 cents a week or 30 cents per person per week on the CATS tax. Does that sound right?
Check your receipts. If you see 7.5 percent sales tax, .5 went to CATS. On a $30 purchase, 15 cents would go to CATS. Depending on what you buy, some items pay the .5 some do not — read the fine print, as always.
Take the next week or so and try to notice the numbers you generate in CATS tax and see where reality takes us. Using city math, I suppose if your household income is $100,000 per year you should be spending about 60 cents per week on the CATS tax.
All I know is we have a wonder — a tax that raises $70 million a year that no one actually pays.
