NC Senator Bill Cook's Legislative Update: May 18, 2013 | Eastern North Carolina Now

News Release:

The Largest Tax Cut in North Carolina History

    All across our state North Carolina families are working hard to make ends meet. But an outdated, archaic tax system that excessively taxes income stands in the way of our state's economic recovery and penalizes our citizens' hard work and success.

    Last week a tax reform plan to simplify state's Depression-era tax code and increase North Carolina's competitiveness to provide the largest tax cut in state history was proposed.

    The Tax Fairness Act is a three-year plan to put over a billion dollars back into the pockets of North Carolina's hard-working families and encourage job growth by providing needed tax relief to job-creating businesses.

    Senate leaders have shared their vision with the Governor, Speaker of the House, and members of the House of Representatives and are committed to working together to incorporate their ideas into the first comprehensive state tax overhaul since the 1930s.

    The Senate plan, which would be gradually implemented beginning in 2014, would significantly reduce personal income, corporate income and sales tax rates by closing special-interest loopholes; eliminating unfair and complicated deductions, credits and exemptions; and expanding the sales tax base to treat businesses that sell products and services equally. The plan protects vital state services like education and transportation infrastructure and maintains federal tax deductions like those for home mortgages and child tax credits.

    The Tax Fairness Act would:

    •   Reduce the top state personal income tax rate from 7.75 to 4.5 percent over three years and reduce the tax rate on lower income earners from 6 to 0 percent immediately upon implementation of the plan.

    •   Reduce the corporate income tax from 6.9 percent to 6 percent over three years.

    •   Reduce the combined local and state sales tax from 6.75 percent to 6.5 percent and expand the sales tax base to include services. Business-to-business transactions within the expanded base will not be taxed.

    •   Reduce the business franchise tax by 10 percent.

    •   Eliminate North Carolina's death tax.

    The plan expands the sales tax base so everyone is treated fairly, everyone pays their fair share and no one gets special breaks or loopholes.

    Also, a tax on what people spend instead of what they earn allows everyone to know exactly what they're paying and gives them more control over how much they pay. This is a fundamentally fair and progressive plan - the more you make, the more you spend and the more you will pay in taxes.

    According to the Tax Foundation, North Carolina has the Southeast's highest taxes. Last year, The Wall Street Journal compared the economies of the nine states with the highest income taxes - like California and New York -to the nine states with no income taxes - like Texas and Tennessee. States with no income taxes attracted more new residents and grew their economies faster than states with high income taxes. And the low income tax states experienced significant job growth while high income tax states lost jobs.

    North Carolina is a high income tax state, and we're suffering the consequences. Our unemployment rate is the fifth worst in the country and our high tax rates are hindering economic growth and pushing jobs to neighboring states. We can't afford to stand still while other states move forward.

    To learn more about the plan, and how it affects your family's bottom line, visit www.nctaxcut.com.

    Legislation Update

    I am working on all the bills I previously filed to be heard in Committee and sent to the House before the deadline on Thursday of this week. Here are two: Senate Bill 664 would consolidate the Domestic Violence Commission with the Council for Women to produce a more efficient and responsive domestic violence system. Senate Bill 329 would allow folks that have been ill for a year or more to collect unemployment insurance if necessary when they try to return to work and are unable to.

    Sponsorship Update

    Since the bill filing deadline is passed, there will be no more sponsorship updates, as no new pieces of legislation will be filed. However, you can keep track of all the bills I have sponsored or cosponsored here.

    Mailing Address:

    300 N. Salisbury Street, Room 525
     Raleigh, NC 27603
     (919) 715-8293     cookla@ncleg.net or bill.cook@ncleg.net