The NY Times has been covering the North Carolina Legislature, especially tax activity. Back in December, I wrote that Republicans would seriously propose imposing taxes on all services (even those of doctors and . . . lawyers) and predicted it would be a nonstarter. Well, the idea went forward, and its main proponent, Bob Rucho, resigned as Chair of the N.C. Senate Finance Committee when it went up in flames.
Having worked on the Tax Reform Act of 1986 for Congress on the Joint Tax staff, I admire base-broadening, which Senator Rucho was after. “Treat everyone and everything the same” may be a good starting point. But treating doctors like tattoo artists looks overbroad. And some folks go so far as to oppose excise taxes on alcohol and tobacco – and would tax whisky just like milk.
My sense is that some of this overbroad thinking comes from deep distrust of government. Well, our government has made lots of mistakes. And distrust of government was a principle of the Founders, who split it up between the states and the central government – and among branches. And any base broadening effort will result in messy (and possibly corrupting) political fights as service providers argue for exemption.
But to say elected representatives shouldn’t draw lines between whisky and milk seems to me as reactionary as requiring fifth graders to pass a cursive writing test.
The Center for New Revenue 