RALEIGH – The North Carolina Association of Realtors has come out strongly against a legislative proposal to grant all counties the authority to levy real-estate transfer taxes to pay for school construction and other projects.
No, really. It’s true. The organization’s executive vice president, Tim Kent, had the unmitigated gall to send me a packet of information, press releases, and multimedia presentations explaining this surprising turn of events, apparently thinking that I would be as easy to bamboozle as all his compliant stooges and former colleagues in the mainstream media.
“North Carolina homeowners do not want to pay an additional 1 percent sales tax when they sell their homes,” Kent claimed, demonstrating his utter ignorance of public opinion on the subject. Despite the fact that North Carolina already levies annual property taxes, sales tax on some of the materials used in constructing homes, and income tax on cash used for home purchases, homeowners believe that their primary means of wealth accumulation is woefully undertaxed. They want to pay more, lots more. But most lack easy access to the mailing address of the North Carolina Department of Revenue and thus find it challenging to donate their money willingly to such a worthy cause. They would clearly find it convenient to pay hundreds or thousands of additional taxes at real-estate closings, when they’ve already got their signing pens out and are typically feeling extra magnanimous. Kent, a registered lobbyist, and his well-heeled association members just don’t understand how common people think.
More generally, there is obviously a groundswell of North Carolinians demanding that elected officials enact new taxes that narrow the revenue base, discourage homeownership, and hide the annual cost of government to reduce taxpayer opposition to budgetary bloat. They don’t want North Carolina governments to be accountable and fiscally restrained by broadly applied, highly visible taxes. They don’t believe there is a single dollar of current tax revenue being wasted. I think Kent should apologize for suggesting otherwise.
Yes, I admit, there are some basic flaws in the case for real estate transfer taxes. For one thing, while advocates say that they simply want to treat homes like any other good and apply some kind of sales tax to them, the analogy does break down upon closer examination. Most home sales involve existing homes being transferred between households, not new homes sold at retail by businesses to consumers. And virtually no items currently covered by the retail sales tax have their value taxed every year by local property-tax departments.
But so what? State legislators haven’t thought much about fundamental principles of simplicity, neutrality, and equity before when levying taxes on North Carolinians. Why should they start now? It’s more important to enact new taxes quickly than it is to enact good tax policy. Besides, homeowners and their real-estate agents actually make lots of money selling property. They can afford to surrender some of that wealth to government. After all, they made it by satisfying a basic human need, the need for shelter. They should be ashamed of themselves. It’s not like they made the money honestly – by, say, suing deep-pocketed companies or teaching at taxpayer-subsidized universities.
And while we’re on the subject, policymakers ought to seriously consider the damage done to our social fabric every year as thousands of North Carolinians convert their home equity, built up over the years by good planning and frugality, into downpayments on larger homes they don’t really need or into liquid assets they can tap for health care, retirement, and other needs. If we keep letting North Carolina families use homes as an effective way to save their resources for the future, they will feel less dependent on government transfer programs. They’ll feel independent and self-reliant. That’s not fair to their fellow North Carolinians who have chosen to practice poor planning and frivolity. We must make everyone equal – even if it is by hatchet, ax, and saw, or their taxation equivalents.
Let’s get real, so to speak. Tim Kent represents an association whose members have a registered trademark on their professional name. Trademarks are registered at the United States Patent Office, part of the federal Department of Commerce. That department is headed by Don Evans, a longtime friend of George W. Bush and a former businessman in the oil and gas industry. The same office patents pharmaceuticals, a practice that has allowed drug companies to become hugely profitable. It also lists registered trademarks for cigarette brands. Bush. Big Oil. Big Pharma. Big Tobacco. And now Big Realty.
See? See!? SEE!!!!!!!!!?
Hood is president of the John Locke Foundation and, like a certain classic Jerry Mathers character, sometimes reckons his calendar a day off, so that yesterday is today.