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Taxes would take bite out of meals
Governments turn to food as revenue source
Published Wednesday, January 23, 2013 2:42 pm
by Herbert L. White

Our daily bread is the proposed target for tax increases.

N.C. lawmakers are proposing quadrupling the state food tax to 8 percent while Charlotte City Council has given approval to doubling the city’s prepared food and beverage tax to 2 percent to pay for improvements to Bank of America Stadium.

Everyone – regardless of social status or income – has to eat, which is why local and state government leaders are turning to food taxation to fund programs.

In Raleigh, Republican lawmakers are proposing quadrupling the N.C. sales tax on food from 2 percent to 8 percent as part of an overhaul of the state’s tax code, which includes eliminating personal income and corporate taxes. Senate President Pro Tem Phil Berger said last week the North Carolina tax template is outdated and needs to be lowered to make the state more competitive with neighboring states.

“It’s important for us in terms of our competitive posture with other states,” he said at a press conference. ”It’s important for us in terms of making sure we have a fair allocation of the cost of government across the spectrum of economic activity.”

The majority-Democrat Charlotte City Council last week gave tacit approval to doubling the prepared food and beverage tax to 2 percent to generate $125 million for improvements to Bank of America Stadium. The General Assembly must approve the Charlotte tax.
“I can’t talk about what we did in closed session,” council member David Howard said.

A food tax is unacceptable to progressives, who see it as a regressive penalty against people who can least afford its cost. Raising the sales tax on food would cost N.C. shoppers who spend $100 a week on groceries an extra $312 a year.

“I think it’s unconscionable that they would reinstate a tax on food and groceries,” said Chris Fitzsimon. executive director of the progressive think tank N.C. Policy Watch. “It’s unconscionable that the money would be used to reduce taxes on the wealthy and corporations. We worked long and hard, a lot of folks from both political parties, to remove the food tax in North Carolina because we thought it was unfairly regressive.”

GOP lawmakers are in position to get the changes they want due to supermajorities in the House and Senate and an ally in Gov. Pat McCrory. They contend that the bite from the additional food tax will be countered by the lower income tax. However, many low-income families don’t owe income taxes, which means they won’t benefit from a cut.

Fitzsimon, noting the state’s food tax was repealed two decades ago, argues its return will impact the most vulnerable.

“It impacts low- and middle-class people far more than the wealthy,” he said. “The food tax was removed in the mid- to late ‘90s and now Republicans want to re-impose it so they can, with their radical tax scheme, give corporations and wealthy people a tax break. It’s beyond belief.”
N.C. Rep. Carla Cunningham, a Charlotte Democrat, agreed.

“We’ve given so many incentives for corporations to come here and then when it comes to job creation, they haven’t done what they said they would do,” she said on N.C. Policy Watch’s Web site. “They need to pay their fair share like everybody else.”


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