Who Wanted Higher Sales Taxes? | Eastern North Carolina Now

    Publisher's note: This article appeared on John Hood's daily column in the Carolina Journal, which, because of Author / Publisher Hood, is linked to the John Locke Foundation.

    North Carolina Democrats running for statewide offices this year are trying to convince voters that Republicans favor higher taxes on "working people" while they, the Democrats, favor lower taxes on "working people."

    The facts clearly state otherwise. During the first decade of the 21st century, there were repeated votes to increase sales taxes or keep those higher tax rates from expiring. Democrats held the governor's office and legislative majorities during this entire period. North Carolinians paid billions of dollars more in sales taxes because of their decisions.

    In 2010, Republicans won their first majorities in both legislative chambers in modern times. In 2012, Pat McCrory became the first Republican since 1988 to be elected governor. What has been their approach to the sales tax? While broadening its scope to cover more services, they also allowed the state sales tax rate to drop by a full percentage point, saving taxpayers about $1 billion a year. The net effect is that, under GOP control of state government, the sales-tax burden on North Carolina households has gone down.

    Let me be clear: There is no legitimate dispute about these facts. If you can read, add, and subtract, you can go pull the state budget bills and fiscal-research reports for each year since 2000 and confirm them yourself. From 2001 to 2009, North Carolina Democrats proposed and voted for higher sales taxes repeatedly. Republicans, then in the minority, opposed them.

    Consider the case of Deborah Ross, the Democratic challenger to U.S. Sen. Richard Burr. Ross served in the North Carolina House from the 2003 session through the 2012 session. During her first year in office, Rep. Ross voted to extend a sales-tax hike that cost North Carolinians about $730 million over the 2003-05 budget biennium. She also voted in 2003 for higher income taxes and to reduce the number of families getting the child tax credit.

    In 2005, Rep. Ross voted again to extend the Democrats' previous sales-tax hikes, costing North Carolina taxpayers another $880 million over the 2005-07 biennium, while also voting to expand the sales tax to candy ($16 million annually) and cable TV ($26 million).

    Over the next two years, Rep. Ross voted yet again for higher sales taxes, but the mechanism was more convoluted. She and other Democrats decided to maintain half of their previous sales-tax hike, costing taxpayers $544 million over the 2007-09 biennium. For the other half, Ross and her Democratic colleagues first allowed the state tax rate to fall, allowed localities the "option" of raising the tax, and took away revenue transfers to those localities so they would be motivated to exercise their "option." In effect, these actions still led to higher sales taxes than would have been true under previous legislation.

    Then, in 2009, Ross and the Democrats raised sales taxes still another time, by $1.9 billion over the biennium (plus another $400 million in income tax hikes, if you're still counting).

    But didn't the Democrats institute a state earned-income tax credit to offset the burden of higher sales taxes on low-income North Carolinians? Yes, but its total annual value was about $100 million. In other words, even if you factor in the EITC, Ross still raised taxes dramatically on households of low to moderate incomes.

    You can tell a similar story about Josh Stein, the Democratic nominee for attorney general, and Linda Coleman, the Democratic nominee for lieutenant governor. They were in the legislature for part of this period, and voted for higher sales taxes. The party's nominee for governor, Roy Cooper, wasn't in the legislature during these years. But before he was elected attorney general in 2000, he served in the House and Senate. In that role, he helped pass other sales-tax hikes, costing taxpayers the equivalent of billions of dollars in today's currency.

    Ross, Stein, Coleman, Cooper, and other Democrats are certainly free to defend their records. They could say that financing state services was their highest priority. But they can't say they opposed higher taxes on working people. That's what they voted for.