Sales Tax Allocation Changes Could Right a Wrong
Let us assume that taxes should be applied equitably, collected efficiently, and distributed to benefit society in general. If this is true then our NC tax system, designed and controlled by Democrats for generations, fails on all counts.
Comes then a Republican legislature in which some have the intent to change this Red Queen system. As always, those who have benefited cry the loudest of the harm being done to them. Charlotte will be used to point out some of the lies a growing city foists on its citizens in support of a continued misuse of a distorted tax system.
Over the years Charlotte has grown quickly, benefiting from a growing economy and the ability to annex. Annexation was a cash cow for Charlotte. Every two years, it would annex some amount of property, bringing city taxes to those annexed and adding those taxes to the city revenue. The annexation was not always done legally (imagine that) but the government bully (Charlotte) having taxes to spend in defending their position, usually won the legal skirmishes. The cash flow added $2 million or more to the city revenue stream every year, with minimal costs associated. In twenty years that is $500 million extra taxes on the citizens annexed, with relatively few benefits.
The recent sales tax (see link) redistribution proposal by the nasty Republicans would remedy another scheme where Charlotte rakes in revenue from those to whom it provides few services.
Currently, sales tax is distributed according to the point of sale. This method benefits those areas which provide retail markets and tourist attractions. Charlotte and Mecklenburg County, with malls such as SouthPark, NorthLake, Carolina Place among other well visited venues, has benefitted. Let us be explicit in how this works.
Frank and his family leave Cleveland County for a shopping trip. They travel to NorthLake Mall where they spend a few hundred dollars, paying the Mecklenburg/Charlotte sales tax. Their taxes then stay in Mecklenburg and Charlotte, which don’t provide them any services except the minor ones associated with their visit. In the meantime, Frank and his family must still provide Cleveland County with enough taxes to provide the services they need because they live there.
This is the distortion that the Republicans intend to remedy. Frank and his family’s sales taxes would be returned to his home county, to provide services there.
There is more. A similar thing happens with property taxes. Businesses pay property taxes where they are located. But businesses don’t use a lot of services, people do. People don’t live at business addresses, they live wherever. Each day finds the roads to Charlotte crowded with commuters going to work in Charlotte and each day finds the roads leaving Charlotte crowded at the end of the work day. So the property taxes Charlotte businesses pay go to help the people who live in Charlotte, but not necessarily the people who work there. This benefits Charlotte to the detriment of the worker who must, once again, make up for the lack of business taxes his community gets because where he works is in another locale.
Let me go a step farther. One of the reasons we are told the city needs to grow is for economies of scale; the larger something is, the cheaper, on a per capita basis, it should be to operate. According to that, along with the understanding of the taxes Charlotte has been receiving for years from people it doesn’t provide benefits for, Charlotte should have one of the lowest tax rates in the area. It does not.
This indicates waste or, more accurately, a misallocation of money, on an enormous scale. Let me simplify: the Charlotte budget is a reflection of a city staff that has no interest in the well-being of the taxpayers. It is a reflection of those who use taxes as a way to pursue their special interests. It is a reflection of a Chamber of Commerce which supports candidates who don’t care about the taxpayers but about the special interests. It is a reflection of elected officials who say they care about the taxpayers but who don’t.
Charlotte and its budget are a black mark on the idea of democracy and equality. It is a symbol of how special interests, government bureaucrats, and politicians abuse the people.
Mr. Pat Cannon should not be by himself, there are hundreds who should be with him. Unfortunately, immoral is not always illegal.
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