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JACK FLEER:

I was thinking in the context of contemporary North Carolina politics that there is this discussion today about eliminating the sales tax on food. I believe that you made a proposal back in the 1970s to do that and you withdrew it, if I recall correctly.

JAMES E. HOLSHOUSER, JR.:

That is right.

JACK FLEER:

Could you talk a little bit about that as sort of substantive decision that you proposed and were unable to fulfill?

JAMES E. HOLSHOUSER, JR.:

I can't remember when we talked about what. But I have come to this conclusion over time that a lot of time your record, your achievements or lack of them, are controlled by events that are beyond your control. It is the same way that when you run for office and it's the same while you are in office. We proposed that in 1975 in a speech to the legislature probably in January. The week before that speech was made, we saw the first increase in applications for unemployment. The budget officer came down and talked with me and he said you need to be aware that this is happening. It maybe just the tip of the iceberg of what is coming. I am not saying change what you are going to say but you just need to be aware of this. Over the next two or three months those figures just continued to rise, sales tax figures started to drop, and it became apparent that the next fiscal year wasn't going to be able to support the repeal of the food tax, even on a partial bases. So finally you just bite the bullet and tell the legislature. I know I asked you to do this you probably are not going to do it anyway but I am telling you this is not a good thing to do right now.

JACK FLEER:

Now was that, of course you weren't running again for that office, but do you think that decision had any negative or positive consequences for the party having made that proposal and then changing it?

JAMES E. HOLSHOUSER, JR.:

I don't think so. It is interesting the different views people have about that particular tax. There is a certain segment of the population says that is the only tax some people are going to pay and everybody ought to pay some tax so you shouldn't take that tax off. Other people say that it is regressive tax, it hits the people who can least afford it as a higher percent of their budget than anybody else. And that is true. It is not an avoidable tax because you have got to eat and if you need medicine you have got to get medicine. So you know that that equation is out there before you ever make the decision. But if you decide that you are going to do it try to do it. Having to back off always looks a little weak I think. But at the same time you have to be blind not to realize what was happening with the energy crisis and all of that at the time. And I didn't really think that had a lasting impact.

JACK FLEER:

The reason I mentioned that is because so often, not only among public figures and citizens but also among scholars, there is the idea that once you make a commitment there is all negative on the side of facing facts and realizing that you can't do what you said you were going to do.

JAMES E. HOLSHOUSER, JR.:

Yes and I had the advantage in this case in that I hadn't promised it during the campaign. I think when you make promises during the campaign and then don't follow through on them it just adds fuel to the fire and the public feeling that politicians can't be trusted. I had been very careful in the campaign to say I believe that I know enough about the budget that I can assure you that there won't be any tax increases during our administration borrowing some kind of unexpected event. That is about as far as I ever went. Never talked about tax cuts.