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March 03, 2006

Financing the future

"Financing the Future" was the theme of the recent two-day Emerging Issues Forum at N.C. State University. The conference featured such big-name speakers as former U.S. Treasury Secretary Paul H. O'Neill, publisher Steve Forbes, former Virginia governor Mark Warner and New Mexico governor Bill Richardson. What major conclusions did they and other speakers come to? N.C. State University extension economist Mike Walden weighs in.

"Number one: North Carolina's tax structure right now -- at this time in history, given the changing economy -- may need a clear overhaul," says Dr. Walden, "if we to see that system produce the kind of revenue that we need for public needs in the coming years.

"Beyond that there was I think a lot of concern about the tax base: Are we taxing our economy broad enough, again given the changes? A good example is the sales tax," he adds. "Sales tax is primarily a tax on hard goods. It excludes services. [There was a] lot of support in that conference for broadening the base to include services but lowering the rate.

"There were some issues raised with the income tax -- particularly the fact that we have one of the highest marginal tax rates on high income households in the Southeast. Are we detracting some of those people from living here?

"And then lastly I think there was a lot of concern about local governments and the fact that perhaps they
need more flexibility in the kind of taxes they use -- yet to get that flexibility they need that to be given to them by the General Assembly."

Posted by deeshore at March 3, 2006 08:00 AM