Letters to the editor - Thursday (4-4-2013)

  • Posted: Thursday, April 4, 2013 12:15 a.m.

N.C. tax system should tap underground economy

North Carolina, like all other states, has an underground economy. North Carolina’s underground economy is not carrying its fair share of North Carolina’s tax burden.


What is an underground economy? It is an economy where individuals are paid in cash that they do not then report to the taxing authority. An underground economy is also an economy where businesses do not report all their income to the taxing authority.

The underground economies are larger in those states that have an income tax where the taxation is based on the amount of income that is reported to the state taxing authority. All other states have an underground economy because of the federal taxation system, but more of their underground economy revenues are captured for the state by their taxing system using consumption type taxes.

North Carolina has a dual taxation system that can capture some tax revenue from the underground economy. North Carolina’s dual system is composed of an income-tax system that is based on the reporting of income which is driven by the information from the federal tax return. North Carolina also has in place a number of different consumption taxes. The state sales tax, motor fuel tax (gasoline/diesel), alcoholic beverage tax, tobacco products tax, state use tax, machinery privilege tax, motor vehicle lease/rental tax, tire disposal tax and solid waste disposal tax are but a few of North Carolina’s consumption taxes.

In modernizing North Carolina’s tax system, one of the main goals should be to capture more taxes from the state’s underground economy. To accomplish this would mean increasing the consumption taxes while reducing the tax rates on those items that are based on income reported or on assets of the individual taxpayer.

I believe that lowering income tax rates and inheritance tax rates, or even eliminating them, would be a large boost to North Carolina’s economy, including its underground economy that will still be in play.

There would be no better method of stimulation for North Carolina’s economy.

— Ray Shamlin

Rocky Mount





Prayer crosses the line

I object to Rowan County commissioners using their elected office as way to proclaim, promote and advance their personal religious beliefs. This is religion being promoted by county government, and I object very strongly.

— Cody Yasinsac

Kannapolis

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