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North Carolina Tax reform needs a clear goal

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Tuesday, 12 August 2025

Written by John Hood

While the North Carolina House and Senate continue to discuss how — or whether — to resolve their budget dispute and enact a new fiscal framework for the next two fiscal years, now is an excellent time for tax reformers in both chambers to spell out precisely what they hope to accomplish.
Some conservatives in the state capital and elsewhere want North Carolina to stop taxing personal income altogether. They point to the economic success of Florida, Texas, and other states that have never levied taxes on personal income. Since income taxes make up half of state revenues, how should North Carolina make up the difference? This faction advocates some combination of higher sales or excise taxes, greater local responsibility for education and other services (financed by higher property taxes), and lower state expenditures.
As I have previously argued, I don’t think it is realistic or necessary for North Carolina to abolish its personal-income tax altogether, although I strongly favor eliminating our much smaller but counterproductive tax on corporate income (it only generates about 5% of General Fund revenue, and does so rather inefficiently).
I agree that income taxes as currently structured are unfair and economically destructive. By taxing resources invested in productive capital multiple times — as personal income, as corporate income, and as dividends or capital gains received on investment principal that has already been taxed — the current system basically encourages us to eat our seed corn rather than planting it for a larger return in the future.
We should be taxing consumption, not total income. So, why don’t I favor replacing most or all of North Carolina’s income-tax revenue with sales-tax revenue? Because that’s not really going to happen, at least not with the tools available. State taxes on retail sales don’t actually apply to all consumption, to every good and service sold at retail. Large swaths of the services households purchase are not and will never be subject to sales tax. That’s borne out by decades of experience with sales-tax systems in other states.
Here’s another way to explain my point: our income-tax base is too broad, yes, but our sales-tax base is too narrow.
When households receive income, they can do one of three things with it: spend it, donate it, or save it for later (which funds investment in physical, financial, or human capital to produce future earnings for consumption or donation).
In 2023, total personal income in North Carolina was about $670 billion. Total spending on personal consumption was roughly $554 billion, of which $204 billion was spent on goods and $350 billion on services. Some of those services are, indeed, taxable. But purchases of medical care ($88 billion) and financial services ($40 billion) are mostly exempt from the sales tax, as are legal and other professional services that make up lots of spending but aren’t separately reported by the Bureau of Economic Analysis.
On the other hand, some business-to-business purchases are subject to North Carolina tax — and they shouldn’t be! A retail sales tax should be just that, a retail tax. Otherwise, you create market distortions and, on the margin, encourage horizontal and vertical integration of business enterprises that could function more efficiently as separate entities.
If I could be persuaded that the North Carolina General Assembly will do something no other state legislature has managed to do — expand its sales tax to encompass all goods and services sold at retail — I might well embrace an end to the income tax. Given the practical and political realities of the situation, however, I favor a different strategy.
Its underlying formula is a simple one: income equals consumption plus charitable giving plus net savings. To tax consumption, then, we can start with total income, subtract charitable giving and net savings, apply a standard deduction adjusted for family size, then tax what’s left — which is, by definition, consumption.
I recognize that’s easier said than done. But it’s still more realistic than taxing hospital bills, I promise.

Editor’s note: John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).

Publisher's Pen: Common sense leadership is our best path forward

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Tuesday, 05 August 2025

Written by Bill Bowman

Fayetteville and Cumberland County can learn a lot about common-sense leadership by observing recent events in our state.
On Tuesday, July 29, the North Carolina Senate demonstrated their commitment to the people by overriding twelve of Governor Stein's vetoes. This action successfully halted a series of policies that many believed would have pushed our state toward radical progressive governance.
These veto overrides signal a renewed focus on common-sense principles and respect for individual liberties. One significant achievement is the passage of the "Freedom to Carry NC" Act, which will make North Carolina the 30th Constitutional Carry state.
This measure respects the rights of law-abiding citizens to self-defense during an era of rising crime and violence. Another significant override eliminated "DEI" (Diversity, Equity, and Inclusion) initiatives in public and higher education. This ensures our schools can focus on traditional S.T.E.M. subjects, reading and comprehension, and academic excellence rather than on divisive social and political issues.
The Senate also took a firm stance on public safety, sending a clear message that the security of North Carolina residents is of paramount importance.
These actions are an encouraging sign of the positive direction our current state leadership is taking by both Republicans and Democrats. This is the confident and responsible leadership that we should demand of our local Fayetteville and Cumberland County elected officials.
Honest, intelligent, and common-sense leadership works, and doing the right things for the right reasons has always benefited all constituents. We saw this firsthand when the new Cumberland County Board of Commissioners was elected.
As municipal election time draws near, it is vitally important that residents vote for individuals who put the overall welfare of the community as their highest priority. Voting is the only opportunity we have to influence the future direction of our community.
What our state leadership is accomplishing in Raleigh must be duplicated locally to ensure prosperity, common-sense leadership, and good governance.
I encourage U&CW readers to vet all local candidates thoroughly. Candidates will be emailed a questionnaire from our editor, and their answers will be published in an election guide put together by the U&CW team.
I encourage both readers and candidates not to rely solely on Facebook and other social media outlets for accurate information or to get their message out.
When it comes to politics, seeing is believing. Look around Fayetteville, and you be the judge. Ask yourself: What positive changes have you really seen in the last decade? And do you want more of the same? Then, compare Fayetteville and Cumberland County to the growth and prosperity of surrounding counties. In the end, it all comes down to integrity, honest leadership, and vision.
So, trust your instincts and vet all the candidates thoroughly to do your part in creating a better community for future generations.
Thank you for reading Up & Coming Weekly.

(Candidates running for local offices in Fayetteville attended the Greater Fayetteville Chamber's Candidates Academy on Aug. 1. The Chamber put on the event to help inform those who are running for office. This year, seats on the Fayetteville City Council and Mayoral positions across the region will be voted on in November. For more information about the Candidates Academy, see page 8. Photo courtesy of Jami McLaughlin)

Political season—Here, there, and everywhere

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Tuesday, 05 August 2025

Written by Margaret Dickson

“Tis the season,” and politics are exploding all over.
Of course, in this overheated and viciously partisan atmosphere, we no longer seem to have an “off” political season. Fifteen months out, we are already well underway to an election that is 15 months away for most state and federal candidates.
Municipal elections are a bit different. In North Carolina, most of them, including Fayetteville’s, are held in odd-numbered years every 4 years with staggered terms for council members. In 2025, Fayetteville is staring down a humdinger of a municipal election.
Incumbent Mayor Mitch Colvin kept residents on pins and needles for months as they wondered, will he or won’t he seek re-election? In June, he finally said “no,” leaving a crowded field of 3 sitting council members who aspire to the top job, including Mayor Pro Tem Kathy Jensen, Mario Benavente, and Courtney Banks-McLaughlin, along with 6 other mayoral aspirants.
Then, out of the blue on the last morning of filing, incumbent Mayor Colvin surprised many by filing for re-election, citing concern for continuity on the city board. That is always a legitimate concern when an elected body is looking at a leadership change, but it certainly reshapes Fayetteville’s race for the top municipal post. It may also leave the sitting council members who joined the mayoral race thinking Colvin was out with considerable buyer’s remorse.
Throw in the 27 candidates, including 6 other incumbents, seeking 1 of 9 council seats, and it is going to be a wild ride.
Fayetteville voters need to buckle up between now and November 4th.
Politics at the state level may be even more tumultuous with more than a year to go.
All eyes will be on North Carolina’s US Senate race, which is shaping up to be one of the most riveting and expensive in US history. Immediate past governor, Roy Cooper, a Democrat, has joined the fray amid much Democratic delight. A popular governor with a long track record of service from the NC General Assembly to the Attorney General’s office to the Governor’s Mansion, Cooper is well known and well liked enough to have never lost an election. He may or may not draw a primary challenger.
On the Republican side, longtime Republican political operative Michael Whatley has announced his candidacy, and he, too, could draw primary opposition. He has apparently been spared a formidable challenger in Lara Trump, daughter-in-law to President Trump and a Wilmington native who passed on the Senate race to continue her career in pop music with a religious tinge. Whatley has never held elective office.
Blessedly, 2026 will not bring a Presidential race. Those happen every 4 years, and Americans are still in recovery from 2024. That does not mean, however, that national politics will not be ever-present and consuming. As best I can tell, Americans will plod toward the 2026 elections as divided as we have ever been, at least since the Civil War some 160 years ago.
Republicans remain trapped in lockstep with MAGA cultists, whether they share those views or not. Democrats are wandering in the political wilderness and warring among themselves about the road ahead, whether to emphasize progressive issues or to choose a middle of the road path more akin to traditional Republican values.
History teaches us that the pendulum always swings in the opposite direction. The question now is how long that will take and how much damage is done to our nation in the meantime.

Happiness is Pandora’s box of chocolates

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Tuesday, 29 July 2025

Written by Pitt Dickey

Have you heard tell of Jeffrey Epstein and the mysterious missing list of his clients? MAGA world was told for years that there was a list of Friends of Epstein which the Democrats had buried to protect themselves. Our own sweet US Attorney General Pam Bondi told America she had the Epstein client list sitting on her desk, waiting to be unleashed like the Kraken. Then Oopsy Daisy, she told us there was no list.
Like Officer Barbrady on South Park: “Nothing to see here, people. Move along.” MAGA did not really want to move along. It had been promised red meat. All it was getting was an empty Tofu jar. AG Pam started getting heat after promising Democratic hides and then hiding the records. Alas. For the first time in history, a woman had talked herself into difficulties.
Pam’s troubles reminded me of another famous Lady Person who had caused troubles, our old pal from Greek Mythology, Pandora. Ms. Pandora is the flip side of Pam Bondi. Pam got in trouble for not producing scalps. Pandora got into trouble for opening a container and releasing troubles into the world. They are sisters from another mother. They do have one thing in common; they are both womenfolk of the female persuasion.
What do women want? Much has been written and conjectured about this topic. What does Mr. Science say? The late great blues singer Bessie Smith sang “Give me a pig’s foot and a bottle of beer.” Didn’t take much to make Bessie happy. Daisy Buchanon in the Great Gatsby was unable to rise from a sofa, explaining that “I am paralyzed with happiness.” Daisy only needed great wealth to make her happy. Are you paralyzed with happiness? If not, read on. If you are of the woman persuasion or know someone of that sort, this column is for you. Cut it out and put it on your refrigerator so you too can be paralyzed with happiness.
Consider how women first arrived on Earth according to Greek Mythology. The Greeks tell us that the first human woman was Pandora, who was created at the direction of Zeus. Her origin is a bit dark. Zeus was in a cranky mood because Prometheus gave the gift of fire to humans. This did not turn out well for Prometheus or humans. Zeus told his lackey Hephaestus to get a wad of dirt and make a woman. The woman turned out to be Pandora. She was not intended to be a gift to humans but rather punishment for them learning about fire. Per the myth, she was a “beautiful evil whose descendants would torment the human race.”
The other Gods, to curry favor with Zeus, gave Pandora a flotilla of groovy birthday presents. Athena gave her fancy clothes and a tiara. Hermes gave her a “shameless mind and deceitful nature.” The Charites gave her a fancy necklace. Another God gave her a garland crown. Like Congressmen cozying up to Trump, they poured on the goodies. Everyone on Olympus chipped in with a gift to be “a plague to men who eat bread.” The coolest gift was a jar which Pandora was told she could never open. Somehow over the last thousands of years, the jar became described as Pandora’s Box.
Unlike Pam Bondi’s empty Epstein files, Pandora’s box was filled to the brim with stuff. Unlike Pam, Pandora opened that sucker up to see what was inside. When she opened the box, all the evils in the world flew out to plague humanity. The only thing that did not escape the box was Hope. The lid got jammed back on the box before Hope could escape. Having Hope stuck in a box while the evils of the world fly around causing havoc does not end this column on a happy note.
Is there a moral we can unearth in the equally sad stories of Pam Bondi and Pandora? Pam is probably not happy with the way things turned out for her non-story. Pandora is probably quite happy with evils flitting about in the world. As Sly Stone once sang: “Different strokes for different folks.” Consider the immortal words of the easy to please Bessie Smith: “Check your razors and your guns/ We gonna be rasslin’ when the wagon comes/ I want a pig’s foot and a bottle of beer/ Send me ‘cause I don’t care/ Blame me cause I don’t care.” Gentle Reader:
Have a pork trotter, a Bud Light and put the blame on Mame. 

(Illustration by Pitt Dickey)