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State tax reform has bi-partisan support; legislators could explore consumption-based plan


Tax modernization:  it’s close to the top of the agenda for legislators when the General Assembly reconvenes in Raleigh at the end of January.  And it was a major point of discussion at a meeting of local and state leaders last week in Wilmington.  While tax reform has bi-partisan support, how to go about it is where Democrats and Republicans diverge. 

The corporate tax rate and state income tax were two items on the table for review in the effort to modernize the state’s tax system.  Representative Susi Hamilton said that there appears to be a great deal of interest among lawmakers in Raleigh when it comes to doing away with both items. But something has to replace them.  

“With the elimination of those more dynamic, elastic sources of revenue, if you will, means we’ll have to come back to something that we can count on more – that’s more static – something that we can project our budget revenues and needs on more effectively," said Hamilton.  "And that’s going to come down to most likely services and consumption tax.” 

While the idea of taxing services could create pushback, Representative Rick Catlin said the scariest thing about making changes is unintended consequences.   Local feedback on the potential effects of any tax reforms, said Catlin, are an important tool for state legislators.

“I think it’d be a great idea if we could put some information together and bring it here locally and make a presentation on what the plan is and get feedback from the folks here locally as to how it’ll impact them, whether it’s a good idea, whether it’s a bad idea, how it affects the county, how it affects the city, how it affects the beach towns, and how it affects businesses.”

The goal of last week’s meeting was to establish a dialog between local leaders and state legislators that will create a unified effort in Raleigh on behalf of New Hanover County.