Senate Leaders Propose Billion-Dollar Tax Cut | Eastern North Carolina Now

    Publisher's note: This post, by Brian Balfour, was originally published in the taxes section of Civitas's online edition.

    In a press conference this morning, chairmen of the Senate Finance Committee unveiled a tax cut plan projected to save taxpayers more than $1 billion over the coming biennium. Following are the highlights from the plan:

  • Personal income tax changes: Lower the rate from 5.499 to 5.35 percent effective 2018. Also, increase the standard deduction from $17,500 to $20,000 for married filing jointly, and $8,750 to $10,000 for single filers. Changing the existing child tax credit to a sliding scale that falls as income rises. For those with family income under $40k, the credit would rise to $2,500 per child, and drop by $500 per every $20k increase in income; up to $120k when it falls to zero. For those who itemize, the mortgage interest and property tax deductions are increased.
    • These changes are estimated to save taxpayers nearly $300 million in their first year, and $600 million the following year.
    • According to a press release, the increase in the standard deduction will remove about 94,000 families from state income tax liability. Together with increasing child tax credits, families of four earning less than the federal poverty level of $24,600 would be exempt from NC state income tax.
    • The removal of these additional families, according to the release, would "move North Carolina closer to the goal of phasing out state income taxes."

  • Corporate tax cut: the corporate tax rate would fall from 3% to 2.75% in 2018, then to 2.5% in 2019. This is estimated to save those taxpayers nearly $120 million over the next two years.
  • Simplify and reduce franchise tax on small businesses: would create a flat $200 franchise tax on the first $1 million of a businesses' net worth. This is projected to save businesses nearly $20 million a year once implemented.
  • Move to market-based sourcing: this would include a change in how service-based revenue is apportioned for tax purposes, moving to where the income-producing activity is performed. This change is estimated to increase taxes on net for those affected by $15 million over the coming biennium.
  • Sponsors of the legislation claim that 99 percent of NC taxpayers would pay less or no state income taxes under this plan, with the majority of benefits going to families earning less than $50k per year.

    Overall, the plan is projected to generate total tax savings of $324 million in the 2017-18 fiscal year, and $710 million in FY 2018-19.

    These changes will no doubt help to further improve North Carolina's business climate, and stimulate continued economic and job growth. One area of concern, however, is how the plan strays from a main principle guiding recent tax reforms: broaden the tax base to help lower rates. By expanding the standard deduction and bringing more people off the tax rolls, and by failing to expand the sales tax base, the tax base becomes narrower and thus rates remain lower than they could otherwise be.
Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




Jones on C-SPAN To Discuss Bill to Stop the Waste of Taxpayers' Money in Afghanistan Civitas Institute, Editorials, Op-Ed & Politics How the Legislature Can Protect Election Integrity


HbAD0

Latest Op-Ed & Politics

Be careful what you wish for, you may get it
Former President Donald Trump suggested this week that if he becomes president again, he might allow Prince Harry to be deported.
It's a New Year, which means it's time to make resolutions — even for prominent evangelical leaders. The Babylon Bee asked the following well-known figures in the faith what they hope to accomplish in 2024:
Vice President Kamala Harris will visit a Minnesota Planned Parenthood clinic, reportedly the first time a president or vice president has visited an abortion facility.
An eight-mile stretch of the Blue Ridge Parkway near Asheville has been temporarily closed due to a string of “human and bear interactions,” the National Parks Service announced.
University of Wisconsin tried to punish conservatives for the fact that liberals regularly commit crimes to silence opposition
most voters think EU officials not doing a good job on illegal immigration
Come from behind by GOP candidate is a blueprint to 2024

HbAD1

Biden spending and energy policies to blame
Tuberculosis carried by illegal invaders has already infected Texas cattle
Sen. Ted Cruz (R-TX) said this week that the only campaign promise President Joe Biden has delivered on as president is the complete dismantling of the U.S. southern border.
Hamas is reeling after losing two of their most cherished leaders on the same day: military commander Saleh al-Arouri, and Harvard President Claudine Gay.
President Joe Biden’s brother told the Internal Revenue Service that Hunter Biden told him he was in business with a “protege of President Xi,” referring to the leader of China, according to notes by an IRS investigator that were divulged during a congressional interview of Jim Biden.
Gov. Roy Cooper seeks a temporary restraining order to block a law changing the composition of the State Board of Elections.
X owner Elon Musk mocked a news segment from ABC News this week that promoted President Joe Biden’s talking points about the Democrat-led Senate’s failed border bill, which critics and many experts have said would make the situation on the border worse.
That’s the question Marguerite Roza of Georgetown University’s Edunomics Lab sought to answer in a recent webinar on the topic.
The University of Florida has fired all of its diversity, equity, and inclusion (DEI) employees and shut down its DEI office.

HbAD2

Hot on the heels of its highly publicized television performance on New Year's Eve, the pop-punk band Green Day announced the release of an edgy new album titled Get the Vaccine, Climate Change Is Real, and Trump Is Bad.
Glenn Beck: 'When the United States government can come after individuals, that's when you know our republic is crumbling.'
Rep. Mark Green (R-TN) reportedly blasted Homeland Security Secretary Alejandro Mayorkas for “stonewalling” details about the illegal immigrant accused of murdering Laken Riley, a 22-year-old Georgia college student.
Financial asset manager BlackRock said in its annual report that environmental, social, and governance policies could hurt its bottom line after Republican state officials cut ties with the company over its ties to China and climate activism.
Daily Wire host Matt Walsh passed away Monday aboard Southwest Airlines Flight WN2208 after the passenger in front of him reclined her seat and crushed him to death, officials announced.
“The Biden administration's plan in the Middle East is to hand over power to the Palestinian Authority, which literally pays the families of terrorists who murder Jews.”
Washington, D.C. — Congressman Greg Murphy, M.D. issued the following statement on the latest continuing resolution:
The official cause of death for Rick Harrison’s son Adam has been revealed by the coroner’s office.

HbAD3

 
Back to Top