Sometimes I just have to write about anything just to take the focus off of the previous entry. What a horrible post….

Um…so I’ve been going to the Durham Neighborhood College for the past six or so weeks now. We’ve got a class project. My group is supposed to come up with something (a proposal? a Powerpoint presentation? I don’t really know) related to Durham’s revenue-generating options, specifically the state-legislature-recently-allowed 4/10 percent land transfer tax and 0.25 sales tax increase (each of which voters would have to approve, and neither in scheduled to be on the ballot in the 2008 at this point in time). I went to a forum on these about a year ago and even took some notes. I think Kevin covered it pretty extensively as did other local bloggers, so I really just need to go back to April (?) and read up. Since then, I know 16 counties have voted down the transfer tax. 6 counties voted down the sales tax increase and just two voted for the increase. Then again, most counties in N.C. are probably conservative. If Durham County put these on the ballot, they’d have a better chance of passing then in just about any other county in the state, although I doubt it would be much more than a 50% chance.

My viewpoint, which seems overly simplistic, is that I can’t see how a 0.004 additional transfer tax is going to cause anyone much pain, contrary to what most real estate professionals seem to imply in their well-funded campaigns statewide to squash these referendums. Again, maybe this is just very naive, but this is what I’m thinking…
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Durham County needs to raise some revenues. The two options are a sales tax increase of a quarter-percent or a land-transfer tax of 0.4%. The N&O covers the topic in depth here.

So here’s my two cents… Maybe I’m wholly impractical and naive, but having the county manager Mike Ruffin advocate the regressive tax over the progressive tax simply because he’s scared of realtors gives me 0% confidence in my government to do the work of the people.

A sales tax is easy because everyone expects it and few people notice the difference between 6.75% and 7.00% and 7.25%. Unfortunately, sales tax really dicks over poor people. I’m talking out of my rear right now, but, for what’s it’s worth, I’m trying to do it skillfully. Say the household of I.M. Poor earns $24,000 a year, or $2,000 a month. They spend $500 (or 25%) on consumable, taxable goods. Say the sales tax is 6%. They’ve just paid $30 in sales tax for the month.

The household of Ima Doctor earns $240,000 a year, or $20,000 a month. They don’t need to spend every penny every month to live comfortably. They live on $10,000 a month, and say 30% of it is on consumable, taxable goods. They’ve just paid $180 in sales tax for the month.

I.M. Poor’s household sees 1.5% of its income go towards paying sales tax.
Ima Doctor’s household sees just 0.9% of its income go towards paying sales tax.

(If an economist or more-learned persons wants to fine-tune the figures in this example, go right ahead).

Ima Doctor: Why should I be penalized for making a lot of money?

Ima, congratulations on the success you’ve achieved, regardless of whether it was achieved through hard work or through Dad paying for medical school and the downpayment on your house. You’ve done well, and your government simply asks that you carry a little bit more of the burden for those among us who don’t do so well–your nurses, your gardeners, your kids’ teachers, your 911 operators, your local IT professionals…

Anyway, it comes back to your basic philosophies about the roles of government and its citizens. I feel the same way about our North Carolina “Education” Lottery, by the way. It’s just a tax on poor people, an insulting, manipulative tax on those who have the most trouble making ends meet. Or if you’re gonna have a gambling tax, at least let us legally play poker and tax that!

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Kevin describes the issue in depth at Bull City Rising

Barry at Dependable Erection on how the mighty Realtors don’t even want the transfer-tax option on the ballot