Charlotte Payroll Tax?

[monsoon]

Word is out the Charlotte city council has asked the budget department to come up with some new taxes for the city. Revenue is apparently not projected to keep up with spending. They are leaning heavily towards a payroll tax and typically these are 1%. So that means if you work in Charlotte, you would pay 1% of your salary towards this tax. For those of you who are math challenged but make a pretty good salaries at the banks, this means your tax would be $1000 on a $100K income.

The question is, would this be a good move on the city's part? Will it hurt or help development?

[turbocraig]

Would that come from my salary, or would my employer be responsible for paying the equivalent amount without it coming out of my check?

[monsoon]

It would come out of your salary. Your employer would deduct it just like Fica and federal and state taxes.

[turbocraig]

Thanks for the clarification, but I guess it really doesn't matter in the end. I'm against it either way.

[dubone]

A lot of city payroll taxes are enacted on the employer, so they add to your total cost of employee for the business, but employee would not perceive it as tax on their earnings.

I suppose the city could do it the other way, but typically having it be an employer responsibility rather than an employee responsibility is more palatable politically.

Also note that if this is enacted, it would be offset by a slight lesser reduction in an other tax structure. That is, they need more revenue, as the current tax structure does not compensate fully for growth costs. Also, as much of residential growth is occuring outside of city limits, from employment growth within the city, city money must be spent to support many who avoid the taxes in the city.

So lowering the property taxes and raising the payroll tax (from 0) means people would be roughly equal living and working in the city as now, and moderately penalized for working in the city, but living outside of the city. That is, there would be a reduction in the subsidy that currently is provided for people who do this.

There is some risk that it would create a situation where employers can't create as many jobs in the city, but generally a 1% differential on employee costs does not have as large an effect. Also, if the jobs weren't in the city, then the city would be saved from the costs it currently incurs for the inbound commuters. It would still not be a good thing, but it would at least be consistent with the intent of this proposed structural change.

I am for this, especially if it is levied on the employer and not the employee.

With our location on a state border, and our issue where growth is not paying for itself, a payroll tax would be a good choice for the city.

[monsoon]

I am for this, especially if it is levied on the employer and not the employee.

[turbocraig]

I guess that's my real beef with this. Our elected bodies are so proud of the fact that they've managed not to raise property taxes in 20 or so years, then they try to fenagle something like this to compensate for a deficit. Why not just raise property taxes so they're in line with what they should be today? I'm fine with that. Really. I'm perfectly Ok with paying for services and infrastructure, etc.; I realize things don't materialize and maintain themselves by themselves. I just don't see the logic in keeping one tax revenue source artificially low while crafting a separate backdoor tax like this one to make up for it. Call a spade a spade for Godsakes.

I understand the argument of somehow finding a way to tax those that skirt the city limits due to lower taxes yet still have access to the city's amenities and regularly utilize the city's infrastructure, but the only genuinely fair way to accomplish that would be to tax those that work within the City of Charlotte, but have a mailing address elsewhere, if that's their true goal.

[MZT]

This would really put Charlotte in the "big leagues" of taxing cities. Relocating companies are already finding the lower land costs and tax structure of surrounding counties more tempting (not to mention the neverending theatre of CMS politics that hangs over Mecklenburg.) I would be uneasy seeing Charlotte take this step.

[mallguy]

Bad, bad move. NYC can get away with in large part because Manhattan is such a desirable destination that happens to be an island in a part of the country with not much buildable space left and with an enormous mass of talent that both companies and individuals will tolerate it and won't and can't really go anywhere else. But in sprawling, dull Charlotte, people and companies will just locate south of Ballantyne, in SC, or will go elsewhere. I hope they do, actually, to show the free-spending clods on County Commission and other bodies that they have to cut it out.

[MZT]

Charlotte couldn't do this without a vote by the Legislature, right? It's hard for me to imagine a sufficient uniformity of opinion from our delegation, that could get that ball rolling.

[rooster8]

Yeah, I'm pretty sure that the Legislature would need to approve this concept. I also think it would hurt the city and would drive companies to the 'burbs.

[uptownliving]

The City Council started this process back in June...so I am not surprised that the lax media around here is just now picking up on this. The main reason is that Charlotte has about $3B in road needs over the next couple of decades that is currently not funded. Of course they could always go out and do bonds and raise the property taxes. However City Council...since they are aware of the fact that at least 30% of the people that work in Mecklenburg don't live here, and therefore don't pay property taxes here...use our transportation system without paying for it. We (the citizens of Mecklenburg) foot the bill for their use of our roads. The politicians are looking to see if there is a better way to tax...to pay for these road needs and tax the people that actually use the roads...not just the people that live here. Right now it is just a review phase and they are looking at everything...not just a payroll tax. They are looking at the advantages and disadvantages of:

-Impact Fees

-Land Transfer Tax

-Toll Roads

-Motor Fuel Tax

-Payroll Tax

Of course if the City Council decides to move forward with any of these taxes they would then have to get approval from the NC Legislature and the Mecklenburg County Commision first.

[MZT]

The need for these tax increases, is just another page from A2's book about hidden inflation.

[dubone]

Oh gosh, so this is the local-option tax for transportion. Ugh.

Ok, so regardless of how the tax is structured, road needs are going to need to be built, and must be paid for. I'd very much prefer a local income-based taxation system over some sort of increase in state taxes or continuing to fall abysmally behind on our transportation infrastructure. Again, to correctly include people commuting into the city but otherwise not funding the treasury to pay for upkeep and expansion. And the state can't seem to remember where the money came from and always ends up sending it to Kinston.

Government investment has a return, so a tax that is bound to go directly to infrastructural investments will not have the same negative interpretation by business as high taxes in general. Really, though, we have no choice if they like it or not, somehow we're going to need to get money to close the funding gap on transporation infrastructure. Either that or everyone is going to need to start walking.

[monsoon]

.... I hope they do, actually, to show the free-spending clods on County Commission and other bodies that they have to cut it out.

[mallguy]

This has nothing to do with the county commission at this point.

[monsoon]

Perhaps County Commission hasn't yet thought about a payroll tax but some of the free-spenders on that board are among the worst local politicians; tax hikes by various governmental authorities around Charlotte, taken together, along with increases in spending, will drive people and companies out of Charlotte and so all of those boards must be told to stop it.

[uptownliving]

Here is a link to the REPORT on alternative taxes the city is looking at.

[monsoon]

It's interesting they are considering taxes they would never get approval to implement such as making independence into a city operated toll road. The feds and the state would never agree to that considering they paid for it.

I do think they should go after the impact fees tax. This would help to slow down the starter home development that continues to plague the city of Charlotte with really bad development and which the city council has no backbone to stop.

The other more interesting one, and source of significant revenue, is the proposed 1% tax on real estate sales. That is if you sell your house, not only do you pay the real estate agent 6%, you now pay the city 1%. They should also be able to get approval on this tax from the general assembly since they already allow it in some counties in NC.

[dubone]

I have no clue whether the feds would allow it, but I read a recent speech by the head of NCDOT that dealt with a similar topic. It pretty much said that due to the funding deficit for roadways, the state would go along with adding tolls if localities approved it.

I personally support making Independence toll in order to pay for the expressway conversion to 485 in the nearer term.

Impact fees would help build the expensive public facilities in the fast growing suburbs,so I would support that.

In general, my goals for the local code would be to improve the revenue off of inter-county commuters, and making/allowing areas and people pay their own way. If suburban growth can fund suburban infrastructure (roads, libraries, parks, schools), then everyone would be happy. They get subsidized, but they also lack a lot that they must fight for. Impact fees would help. If tolls and local gas taxes could fund local roads, not only could we actually start doing project that improve people's transportation, but we also set up a system where we can keep our own money in the county rather than subsidize eastern NC.

I think if more of these smaller, targetted taxes, where revenue is earned from an activity that increases governmental cost, we can have more of a sustainable tax code. It can keep us from having to raise property taxes as much, as people shift their habits.

[A2]

This would be the worst move they could ever make. If you want to see sprawl just pass this tax. No one will want work Uptown to get another haircut in their pay. I already spend over $100 bucks per month just to park Uptown (of which my employer helps with none of it!).

As for taxes, I still have not found a law that shows me where I have to file Income Taxes. Income tax is the BIGGEST scam in the country. Now don't get me wrong. I pay them, since I really don't want to be surprised by Mr. IRS man beating down my door.

Speaking of taxes and such, PLEASE watch this movie and pass the link along. Incredible work. It was only shown in a few cities and the Gov't would never really want it played to the masses since it uncovers so many truths about how the working man has been suckered into the "system" for so many years.

From Freedom to Fascism

http://video.google.com/videoplay?docid=-4...75242198&q=

Enjoy! But watch with caution as some of this stuff will scare the hell out of you.

A2

[monsoon]

I have no clue whether the feds would allow it, but I read a recent speech by the head of NCDOT that dealt with a similar topic. It pretty much said that due to the funding deficit for roadways, the state would go along with adding tolls if localities approved it.

[dubone]

I think that is the idea, though, to put a toll on Independence in order to fund the widening. If the high-cost widening of Independence can be paid for with a toll paid by the high volume of traffic on that road. If that high cost widening can get off our normal list of road needs, it opens up that funding for other roads that we need. Those other needs would otherwise have wait for TIP funding or wait for building by the city.

With cost shifting and gaining revenue directly on that road, it could work.

If the revenue from the toll would go somewhere other than improving Independence, then I'm certain that it would be rejected by all levels of government.

[monsoon]

That is a different issue than what is being addressed here. The taxes being considered by the city are to address shortfalls in funding the Charlotte city government. The city government does not fund highway expansion in this state though they have done so in the past in Charlotte and possibly this is what they are trying to cover. It's a very long shot the state will let them convert Hwy 74 to a toll to fund expansion in Charlotte however given this is one of the cross state highways and not just a city highway like 540 in RDU. It's for sure the feds won't.

[dubone]

The report states what they are trying to do. They are trying to build a local revenue stream that would apply to a state responsibility. The state TIP is drastically underfunded, so local needs end up sitting on decades long queues. The city ends up having to use property taxes to do state road projects because it can't wait.

Asking the state General Assembly to add Independence to the toll list and getting federal approval for it gives the NC Turnpike Authority the ability to put up a toll on Independence. That would raise $7.7m annually, which could be borrowed against as an annuity to fund the Independence widening that currently is waiting for state funding. By removing Independence from that queue (the TIP), the money this division gets from the state formula can go for another state project in the city/region. That means, the city won't have to spend as much money to supplement in order to get our state roads expanded.

I like that plan.

The bottom line is that revenue is needed because we have billions of dollars in unfunded transportation needs. Right now, we are suffering from roadways way over capacity, and from high property taxes that are being used as a stop gap.