NC sales and services tax proposal runs into more trouble

“[A] swap from income to sales taxation . . . in North Carolina . . . would require sales tax revenue to increase from 1.8 percent to 4.9 percent of state personal income. With the same sales tax base, North Carolina would have to raise its sales tax rate from 5.75 percent to 15.9 percent. With base broadening that would increase the implicit sales tax base to 50 percent of personal income, the rate would have to rise to 12 percent.” Martin A. Sullivan, http://taxprof.typepad.com/files/138tn0789.pdf.

I can’t vouch for those numbers, but I have no reason to doubt them.  It remains hard to imagine the Legislature will adopt such a radical proposal.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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