I don’t know precisely when the infection started, but it’s been evident for years that North Carolina’s political class suffers from a disease one might call the Quicken Pox.
In a constitutional government such as ours, where power is separated into competing institutions, the intended result is not to make change easy or rapid but instead to make it challenging and deliberate. The founders of our state and nation believed that we were more likely to suffer from the ravages of herky-jerky legislation and bureaucratic busybodies than we were to benefit from bold, persistent experimentation.
Of late, though, impatient North Carolina political and governmental actors have gotten themselves into trouble by running up against the constraints of law, finding them irritating, and ignoring or circumventing them. For example, when Jim Black wanted to be the N.C. House Speaker again, but discovered that his party had lost the elections, he chose to bribe an impressionable lawmaker to switch parties so he could retain power. When Black and other legislative leaders wanted to enact a state-run lottery but discovered that it wouldn’t pass either chamber if they followed the rules č such as the one requiring separate votes on separate days for bills raising revenue for the state č they chose to break those rules.
Another outbreak of the Quicken Pox has regulators and judges enacting new laws, though they aren’t empowered to by the state constitution, because they truly believe the law to be so necessary or beneficial that it can’t wait for legislative approval. The pattern is commonplace now in environmental regulation, where unelected regulators oversee large swaths of the private economy as if they were commissars just arrived from the Kremlin. In our criminal-justice system, new “rights” have been created, old rights destroyed, and a state medical board recently tried to halt executions in the state, contrary to the majority sentiment of North Carolinians and their duly elected representatives.
Which brings me, of course, to the topic of interior design.
As one can readily judge by a quick visit to my tacky office or my child-infested home, a talent for interior design is not part of my birthright. This is the first and likely last time I’ll have anything to say on the subject. As it is, the matter at hand is not whether a certain mauve curtain clashes with a certain aquamarine chaise lounge, but instead whether the advice an interior designer might offer should be subject to the state’s sales tax.
Over the years, several different panels of prominent North Carolinians have convened to study the issue of tax reform. A common recommendation has been for the state to expand the scope of its sales tax to include services sold at retail. The reform could be revenue-neutral, at least in the short run, by cutting the tax rate to offset the projected revenue gain from expanding the tax base to include medical, legal, financial and personal services. So the proposal need not necessarily raise the hackles of fiscal conservatives.
Whatever you think of the merits of expanding the sales tax to cover services, it must be admitted that the idea is a political nonstarter in Raleigh. The professions whose bills would include the new tax are among the most powerful lobbies in the state. Faced with the prospect of advocating a tax change that would both aggravate key elites and alarm the masses, the governor and general assembly have shied away from it.
Officials at the N.C. Department of Revenue have taken it upon themselves to expand the sales tax via bureaucratic dictate. As the Triangle Business Journal recently reported, they have audited some 20 interior-design firms across the state and sent overdue notices for between $8,000 and $200,000 in uncollected taxes that, they allege, should have been charged for consultation. Interior designers already, properly, charge their customers sales tax for any furnishings they might supply as part of their service. But the revenue department claims that designers should have been charging a service tax, as well.
The state’s claim is not decorous, to say the least. But I suppose that the officials in question truly believe it should be the law, if only that pesky legislative process weren’t in the way. Pity them. They, too, suffer from the Quicken Pox.