Editorial: Tax overhaul would help rich, hurt poor

May. 08, 2013 @ 07:44 PM

Just imagine if someone said they planned to reform state nutrition standards by taking food off your plate and giving it to someone much wealthier.

The rich get fatter, while the poor get hungrier.

That’s effectively what Senate Republicans seem to have in mind with their so-called “tax overhaul proposal,” which they rolled out for the media on Tuesday.

It’s not so much an overhaul (which the Depression era system sorely needs) as it is a tax rate cut for the wealthy and an expansion of the sales tax that would put more of the burden on poor and middle-class people, as well as the elderly.

In an Associated Press report, Sen. Bob Rucho, R-Mecklenburg, said that North Carolina needs a tax system that’s based more on consumption and that the current system has promoted stubbornly high unemployment rates, diminished median income and created higher poverty rates.

“The existing system has failed us, and what that means is we need to find an alternative that will create the jobs that put North Carolinians back to work,” he said. “We believe this plan will accomplish that.”

The three-year plan would cut individual and corporate income tax rates and eliminate the estate tax. It’s estimated that the plan would reduce taxes by $1 billion, which would be at least partially offset by the expansion of items covered by the state sales tax, including groceries, prescription drugs and insulin.

Senate Majority Leader Martin Nesbitt, D-Buncombe, protested: “They’re cutting taxes for the wealthiest of the wealthy and paying for it by taxing vital services and goods for the middle class. This plan takes those struggling the most and makes life a little harder.”

The North Carolina Justice Center issued a statement Tuesday that concurred with Nesbitt, indicating that the Republican plan will hurt working families and the broader economy.

“By cutting income taxes and expanding the sales tax to more goods and services, the Senate leadership has pursued a shift in tax burden from the rich to the poor, not tax reform,” the statement reads. “The result is a plan that not only requires low- and middle-income families to pay more while the highest-income families pay less, but also reduces the state’s ability to invest in a foundation for economic growth by cutting state revenues by $1 billion each year.”

That’s equivalent, the N.C. Justice Center noted, to the entire community college system.

We have long maintained that the state’s tax code is outdated and needs reworking.

However, this just doesn’t seem like a serious effort. Instead, senators are playing games with arithmetic and demanding more sacrifice from people who can least afford it.