Does North Carolina have a sales tax or a cascade tax

North Carolina has a sales tax, right? A sales tax is supposed to tax the final sale of goods and services and only the final sales. But the fact is that our sales tax applies not only to final sales but also to business to business sales–that is to sales from one stage of production to another, which causes what is known as a cascading effect, leading to a tax rate on final sales that is actually higher than the statutory sales tax rate. From here’s how it works.

DEFINITION of ‘Cascade Tax’

A tax that is levied on a good at each stage of the production process up to the point of being sold to the final consumer. A cascade tax is a type of turnover tax with each successive transfer being taxed inclusive of any previous cascade taxes being levied. Because each successive turnovers includes the taxes of all previous turnovers, the end tax amount will be greater than the cascade tax rate.


Cascade tax can create higher tax revenues compared to a single stage tax, because tax is imposed on top of tax.
For example, a government levies a 2% cascade tax on all goods produced and distributed. A company sells $1,000 worth of stone for a tax-inclusive price of $1,020 ($1000 + 2% cascade tax) to an artist. The artist makes a sculpture out of the stone and wants to make $2,000 when he sells it to an art dealer, so he adds this figure to what he paid for the stone to get $3,020, and then adds on the cascade tax to bring the total to get $3,080 ($3020 + 2%). The art dealer wants to make $5,000 for the sculpture, adding this to $3,080 for a pre-tax $8,080. She then adds the 2% cascade tax for a total price of $8,242. The government collected taxes of $242, which is actually a rate of 3.025% ($242/$8,000).

Maybe instead of trying to find ways of extending the sales tax to services the more important fix that the tax needs is to get rid of this cascading effect by abolishing the tax for business-to-business sales.

Let’s have freedom without the but-face

Eric Rowell’s column this week in the Herald Weekly (serving Huntersville, Cornelius, and Davidson), opens this way:

Have you ever heard someone say something along the lines of “I’m all for free speech, but …”

Unfortunately, yes, I have — too frequently, and usually from those who don’t believe in free speech at all. I call that particular formulation “but-face” after this scene from “Buffy, the Vampire Slayer”:

buffy butface1

buffy butface2

Here are some examples:

Barack Obama:

Here in America, we know the free market is the greatest force for economic progress the world has ever known. But —

Hillary Clinton:

There is no greater force for economic growth than free markets. But —

John Kerry:

I respect the Second Amendment, and I will not tamper with the Second Amendment. But —

In practice, but-face is appearing to champion the principles of freedom before saying “but,” then

proceed[ing] as if the phrase preceding the “but” was a lie they just invalidated, a verbal crossing of fingers behind their backs.

Which suggests to me they know people believe in freedom, so they have to attack it indirectly. And what better way to do so than in the guise of defending freedom?




CMS parents want neighborhood schools

Members of the Charlotte-Mecklenburg Schools Board of Education have considered using busing to promote racial and socioeconomic diversity.  But it appears that CMS parents from every walk of life do not support that idea.

Ann Doss Helms of the Charlotte Observer writes,

MeckEd said neighborhood schools consistently emerged as a high priority: “Whether from a struggling, largely African American community, or a high performing, well resourced, predominantly white community, the consensus is that everyone deserves a good school reasonably close to where they live and that bus rides of an hour or longer are not an effective way to address issues related to diversity, equity, and access to a quality education (unless it is a parent/student choice).”

MeckEd’s findings are pretty compelling, but there is no guarantee that members of the school board will act on those findings.

A Different Kind of College Guide

Heterodox Academy describes itself as:

A politically diverse group of social scientists, natural scientists, humanists, and other scholars who want to improve our academic disciplines and universities.

We share a concern about a growing problem: the loss or lack of “viewpoint diversity.” When nearly everyone in a field shares the same political orientation, certain ideas become orthodoxy, dissent is discouraged, and errors can go unchallenged.

To reverse this process, we have come together to advocate for a more intellectually diverse and heterodox academy.

It recently announced the publication of the Heterodox Academy Guide to Colleges, which:

Rates America’s top 150 universities (as listed by US News and World Reports) … according to their commitment to viewpoint diversity. Is it a place where you are likely to encounter a variety of views on politically controversial topics? Or do school policies – or the students themselves– impose a rigid political orthodoxy that punishes dissenting opinions and creates a climate in which students are afraid to speak up, even in seminar classes?

If you or your children are applying to college (or if you want to find where your alma mater stands in the rankings), check it out.

Price-gouging: a lesson from Raleigh

Price-gouging laws are another instance of “fixing” a problem by making it worse. Here is a video from Art Carden that explains. Simply put, after a disaster, a (temporarily) high price acts like a cattle call to bring supply where it’s needed from where it’s plentiful:

The video is based on Duke professor Michael Munger’s piece from 2007, “They Clapped: Can Price-Gouging Laws Prohibit Scarcity?

Pay a ransom once, and what can you expect?

Adam Kredo of the Washington Free Beacon answers that question.

Iran is seeking “many billions of dollars” in payments from the United States in exchange for the release of several U.S. hostages still being detained in Iran, according to reports by Iran’s state-controlled press that are reigniting debate over the Obama administration’s decision earlier this year to pay Iran $1.7 billion in cash.

Senior Iranian officials, including the country’s president, have been floating the possibility of further payments from the United States for months. Since the White House agreed to pay Tehran $1.7 billion in cash earlier this year as part of a deal bound up in the release of American hostages, Iran has captured several more U.S. citizens.

Future payments to Iran could reach as much as $2 billion, according to sources familiar with the matter, who said that Iran is detaining U.S. citizens in Iran’s notorious Evin prison where inmates are routinely tortured and abused.

Iranian news sources close to the country’s Revolutionary Guard Corps, or IRGC, which has been handling prisoner swaps with the United States, reported on Tuesday that Iran expects “many billions of dollars to release” those U.S. citizens still being detained.”

“We should wait and see, the U.S. will offer … many billions of dollars to release” American businessman Siamak Namazi and his father Baquer, who was abducted by Iran after the United States paid Iran the $1.7 billion, according to the country’s Mashregh News outlet, which has close ties to the IRGC’s intelligence apparatus. …

Rumors of future ransom payments to Iran come as Congress continues to investigate the circumstances surrounding the $1.7 billion cash payment, a portion of which was delivered by plane to Iran just hours before it released several U.S. prisoners.

The Free Beacon recently disclosed that details of this payment and other details bound up in the hostage release are being stored in a highly secure location on Capitol Hill, preventing many from accessing the documents, which are not classified but are being treated as such.

The three documents show that the cash payment was directly tied to the prisoner release, adding fuel to claims of a ransom payment, according to sources who have viewed them.

Learning important lessons from embattled Israel

Tevi Troy‘s latest column explains that America’s next presidential administration could turn to the Middle East’s most stable democracy for some valuable lessons.

As Americans prepare to elect a new president, they must do so recognizing that whomever they choose will have to navigate the country through disaster.

Every president must face crises, without knowing in advance what those crises will be. In seeking for guidance on how to confront this difficult situation, the next president can take lessons from Israel when it comes to dealing with disasters.

One thing Israel has in spades in resilience, the ability to bounce back after taking a blow. Americans can tick off the major domestic terror attacks the country has faced on one hand: 9/11, Oklahoma City, the Boston Marathon bombing, San Bernardino. Israel, in contrast, has suffered through far too many terror attacks to count. Furthermore, these attacks have been from a multitude of types: suicide bombings, bus attacks, missile launches, hijackings, attacks on Olympic athletes, assassinations, and many more. But Israel has shown a remarkable resilience in the face of these attacks. After a terror attack, the authorities respond, clean-up crews spring into action, and storeowners—sooner, rather than later—reopen shuttered establishments.

This kind of resiliency does not emerge accidentally. Israel puts both resources and effort into its resiliency project. According to Meir Elran, director of Israel’s Homeland Security Program, resilience among the civilian population requires preparation, information dissemination, and leadership, especially at the local level. …

… Going forward, the United States must be prepared to provide this kind of leadership as well.

From radical Islamic groups— such as Islamic State—penetrating social media as a means of inspiring and recruiting jihadi fighters, to Chinese and Russian hackers accessing government records, the US must be able to have the resources and capabilities to combat both cyber and conventional threats, and be resilient in response to successful attacks. If a small, powerful country like Israel can learn these lessons, the US should be able to follow suit.

EPA chief not interested in dissenting views

Michael Bastasch explains for Daily Caller readers why those who depart from conventional wisdom in the global warming debate will have a hard time sharing their thoughts with the head of the U.S. Environmental Protection Agency.

Environmental Protection Agency Administrator Gina McCarthy said she’s done talking to “climate deniers” who don’t think human activities are causing global warming.

“If they haven’t figured out by now, what in God’s name could anyone say to them?” McCarthy said in a Facebook Live interview with Mashable Tuesday.

“I don’t check out flat Earth society and I’m not talking to climate deniers,” she said. “That’s it. Sorry, I know I’m supposed to be for everybody, but my patience has worn thin over eight years.”

McCarthy has been one of the more controversial EPA chiefs since the agency’s global warming rule, called the Clean Power Plan, was finalized under her watch. Republicans even called for her resignation in the wake of the EPA-caused Gold King Mine spill in 2015. …

… This isn’t the first time McCarthy has singled out “climate deniers.” She said “normal people” not global warming skeptics would win the climate debate in a June 2015 speech at a White House summit.

“I am doing that not to push back on climate deniers,” she said. “You can have fun doing that if you want, but I’ve batted my head against the wall too many times and if the science already hasn’t changed their mind it never will.”