Should North Carolina Eliminate its State Income Tax?

Newsmax has a report that seven states, including our neighboring state of South Carolina, are considering the elimination of their state income tax.  There are nine other states-- including our neighboring state of Tennessee-- that do not have an income tax currently.

The income tax is not equitable.  Even if rates are flat (and they are not), people who earn more pay more taxes-- all other factors held constant.

Moreover, the federal income tax is a massive scheme of income redistribution.  The graduated income tax system and the existence of the earned income tax credit assures that the system is terribly skewed.  That makes it even more compelling to suggest that income taxes should not exist at the state level.

Getting rid of the income tax in North Carolina could be a powerful economic development tool.  Citizens should be wary of maintaining an inequitable income tax system that serves Marxist ends-- from each according to his abilities, to each according to his needs.

Comments

[William Heasley]

Joe:

How about eliminating these taxes first then tackle the state income tax:

The inheritance tax
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax
Gross Receipts Tax
Hunting License Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service FeeTax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

What people don’t realize is that their effective tax rate is approaching 50% or well over 50% when you account for all the tax.

[D]

Tires have Federal taxes built into the price and then NC buyers pay NC sales taxes on the Federal taxes.

[Joe Guarino]

Hi, Bill--

Yes, you are right that we labor under a multiplicity of taxes. They have all kinds of ways to take our property. And yes, the effective tax rate for some of us is well over 50 percent.

I suppose if the income tax were eliminated, some combination of these other taxes would be increased. I just find something nefarious about the whole idea of the income tax because it is a prime vehicle for social engineering and redistribution. It also subsidizes many activities in which government should not be involved. And few people even question it.

[Joe Guarino]

That is an elaborate web that was weaved, D.

It was interesting to hear how Romney only pays 15 percent on his investment income, until it was pointed out that the money had already been taxed when it was initially earned. I suppose we should not be rooting for double taxation.

[David Craft]

Romney is not paying taxes on money he already earned. He is paying taxes on the current business activity of his investments.

With your logic, I would not owe taxes on rental income from investment property because I have already paid taxes on the funds used to buy the house.

I pay over 35% on my investment income while Mr. Romney pays 15%. Explain that?

[Joe Guarino]

Making a grab for citizens' money in any way, shape or form is dear to the heart of true progressives. Implicit in your statements is the premise that the money should not belong to the owner of the rental house, or the owner of the investments.

I can't explain away, however, your last statement if that is the case.

[bubba]

"Explain that?"

Someone's robbing you blind.

[Harold Milner]

DC,

Yeah Bubba's right, you're getting robbed. 35%? Unheard of. If I were you I'd get an accountant or attorney who can give you good advice. Capital gains, capital gains, is what they'll try to hammer into your head.

Romney plays by the rules. Probably has state and fed revenuers living at his business picking his finances apart for that extra dollar.

[bubba]

"Romney is not paying taxes on money he already earned."

His profits as a shareholder are taxed, and his capital gains as a shareholder are taxed.

You need someone to explain to you how this actually works, don't you?

Here you go:

"John Berlau and Trey Kovacs of The Wall Street Journal point out that Mitt Romney’s capital gains income was paid with after-tax corporate dollars and, therefore, taxed twice.

I don’t expect people on the left to understand this. And even if they do, I don’t expect them to stop their anti-rich, class-warrior, Buffett secretary nonsense. But hope springs eternal.

....In other words, after the combined top tax rates hit $100 of corporate income, $55.25 remains for the investor. And this figure doesn’t even include various state and local taxes, or the death tax. …If the traditional disclosure of tax returns is elevated into a 'teachable moment' about the burdens of double taxation, all Americans could be winners."

Only problem with that last sentence is that lots of folks (possibly including the one above who asserted there was no double taxation) who are apparently not "teachable" about anything that runs contrary to their worldview agenda talking points.

http://www.pappasontaxes.com/index.php/2012/01/25/romneys-effective-tax-rate-closer-to-45/

[Stryder Polifrog]

Bubba:

"Someone's robbing you blind."

Heh!