Date: Wed, 5 Feb 2020 09:34:57 -0500
From: Tarus BALOG
Subject: The GOP and Regressive Taxes
As expected I figured I’d hit a nerve bringing up the discussion of the sales tax increase. I’d like to bring up two more points for consideration.
The first concerns my comment that the signs I’m seeing around the County are sponsored by the Chatham County GOP. Gail Alexander called me out for saying “looks like” in my post as she took it to be a snarky comment. That wasn’t my intent. The print at the bottom of the signs is small and I’m older, so I wasn’t 100% sure when I wrote my original post. I’ve since looked more closely and confirmed that the signs say that the local GOP sponsored them.
Mary Alexion wrote “Assumptions such as VOTE NO are Republican signs with the inference they are bad, is dumb”. Linda Bienvenue writes “And you think it’s the GOP -why? Just trying to figure out what that has to do with anything”.
I don’t “think” they are sponsored by the GOP, it says so on the sign, and I never inferred the signs were “bad”, it’s just that it is important to understand who is trying to influence your vote. Obviously the GOP hopes to gain political ground by opposing the tax. When Bill Crawford started this discussion in #6612 his first words were “The Democrats on the Chatham Board” and no one called him out for that. For the record I used to be a Republican and I am now unaffiliated.
Now on to the second point. Several people pointed out that sales taxes are considered “regressive taxes”, which are taxes that impact the poor more than the rich. That is true and there are a number of steps we could take to mitigate that, such as removing the tax on food. However, the question before us is not “Should we remove sales tax?” but is instead “Should Chatham County increase the sales tax rate to 7%?” I’d like to address that, specifically referencing how that would affect the poor.
1) Chatham County is a wealthy county.
According to the latest census from 2010[1] Chatham is number 5 out of 100 counties ranked by per capita income. Two of our neighbors, Orange and Wake, are ranked 1 and 2, and they have tax rates of 7.5% and 7.25%, respectively.
Our neighbor Harnett County comes in lowest on the list at number 68, and their tax rate is 7%. All the others are somewhere in between. I bring this up because it shows there is no correlation that sales tax rates have a significant impact on per capita wealth. If it did, the poor in Harnett county should be streaming over the border to live in Chatham. I believe that cost of housing and access to jobs play a much more important role, and that this increase will have zero negative impact on people looking to move or shop here.
2) The people of Chatham County don’t shop here.
According to the Census, the per capita income of Chatham County is $29,991, right behind Dare County at $30,327. However, according to the State, sales tax revenue in November of 2019[2] for Dare county was $5.2 million dollars but Chatham was only $2.9 million, even though Chatham has almost twice as many households (25,845 vs. 14,335). Both counties have a 6.75% tax rate. The *only* explanation for the discrepancy is that Chatham households have more options to shop outside the county and they do so, again proving that sales tax rate differences have no impact on shopping habits.
3) Even the impact to the poor will be minimal.
The minimum wage in North Carolina is $7.25 per hour[3]. Assuming 2080 hours in a work-year, that comes to a total wage of $15,080 per year. Let’s also assume that none of that is taxed and all of it is spent in Chatham County on retail goods and services subject to sales tax.
The increased tax burden for this minimum wage worker becomes $37.70 per year, or about 10 cents a day. Since a minimum wage worker earns 12 cents a minute, this increase represents less than a minute of labor per day.
It won’t be noticed.
4) Part of the increase in tax revenue is targeted at affordable housing.[4]
Even though sales taxes in general are regressive, this particular increase is aimed, in part, to address housing issues for our poorest citizens.
Okay, so flame on. Feel free to attack my reasoning, but please back it up with something more than “you’re just a commie liberal”. I also want to point out my main support of this increase is just to bring us closer into parity with our neighboring counties so we can provide the same services for our citizens as they can. I would be against an increase greater than 0.25%.
-T
PS I have another very selfish reason for wanting to see a 7% sales tax – it is much easier to calculate in my head than 6.75% (grin).
[1] https://en.wikipedia.org/wiki/List_of_North_Carolina_locations_by_per_capita_income
[2] https://files.nc.gov/ncdor/documents/reports/monthly_sales_11-19.pdf