RALEIGH – Language matters. Political debates often stay within contours defined by the words politicians and the news media employ.

Consider the issue of tax cuts in the 2006-07 budget bills now being debated in the North Carolina General Assembly. In Gov. Mike Easley’s proposal, the statewide sales tax of 4.5 percent would drop to 4.25 percent in October 2006 (the local component of the sales tax pushes the current total to 7 percent in all jurisdictions except Mecklenburg County, where an extra half-penny for transit edges the rate up to 7.5 percent). In the Senate’s plan, the sales tax would also drop to 4.25 percent, but not until January 2007, while the current top income tax rate of 8.25 percent would drop to 8 percent in January. The governor’s budget had no reduction in the income-tax rate, but now says he supports the Senate version.

There are two problems of semantics here that serve to obscure what’s really going on. First, the frequent assertion that these proposals constitute a “phasing out” of the temporary taxes enacted in 2001, extended in 2003, and extended again in 2005 is inaccurate. Under the state budget enacted into law last year, the state’s 4.5 percent sales tax is already scheduled to fall to 4 percent in July 2007. The same law requires the top income tax rate of 8.25 percent to disappear in January 2008, leaving three rates of 6 percent, 7 percent, and 7.75 percent.

By using the term “phase out,” politicians have succeeded in spinning their proposals so as to claim credit for a second year of reduction that is already the law of the land. Nice work if you can get it.

A bigger problem is what these political leaders are not saying: that all these tax cuts are temporary! They only provide relief from the current fiscal baseline for a few months. All the comparisons of tax cuts vs. spending increases are glossing over this critical point. The vast majority of spending increases in the budget proposals will be permanent expansions of government, permanent obligations for current and future taxpayers. On the other hand, the tax relief is a sort of election-year deal sweetener. If enacted, it will still leave North Carolina with a significant higher tax burden than we had in 2001, before all the state and local tax increases began (since many of the tax expansions and hikes, including a half-penny on the sales tax that is technically local but in reality a state-imposed increase, are not being repealed).

Pardon me, and other taxpayers, for not expressing exuberant joy at the paltry, fleeting gifts the General Assembly seems poised to provide. Their leaders can and should do better.

Hood is president of the John Locke Foundation.