A taxing problem: N.C. General Assembly should look to update state’s tax code to re?ect service-based economy

The N.C. General Assembly should continue to look into broadening the state’s tax base to include more service-oriented businesses.

The state has not had a major change to its tax code since the Great Depression.

However, the commercial landscape of the state has changed considerably, moving from a more manufacturing-based economy to a service-oriented one.

Only 30 out of the state’s 168 services are taxed. Taxes should be broadened to include accounting and legal services, which are not currently taxed.

A joint N.C. House and Senate finance committee convened earlier this month to discuss the issue.

Although no bill was proposed, the General Assembly is nevertheless headed in the right direction.

The proposed tax changes came about as legislators have struggled to balance the state’s $4.6 billion shortfall.

Furthermore, if the tax base is broadened, taxes could be cut across the board.

“We have high rates now because we tax very few things,” Sen. Daniel Clodfelter, D-Mecklenburg, told The Daily Tar Heel. He strongly supported taxing services this summer.

Some argue that remodeling the tax structure in the middle of economic recession could worsen the situation.

But the state has had to make heavy budget cuts that affect everybody, especially people attending the University.

In these difficult times, drastic measures must be taken in order to ensure that the state obtains the necessary revenue to fund basic services.

The legislature should draft a bill that moves this plan into action.