NC Senator Bill Cook's Legislative Update: June 25, 2013 | Eastern North Carolina Now

News Release:

    This week, I want to give you an update on the tax reform policy I mentioned in a previous newsletter.

Unveiling a New Compromise Tax Reform Plan

    It is abundantly clear that real tax reform is needed in North Carolina - our state has the highest taxes in the Southeast and one of the worst business climates and unemployment rates in the country.

    You elected us to change the direction of our state and remove obstacles that are hindering our economic growth, and high taxes remain North Carolina's greatest roadblock to recovery.

    I still believe the bold tax reform plan we introduced in May is a strong policy for North Carolina. Unfortunately, others disagree, and we ultimately have to craft a plan that can pass the House, the Senate and be signed by the governor. We can't afford to do nothing.

    To that end, the North Carolina Senate introduced and tentatively passed last week a new compromise plan for tax reform - one that addresses concerns about the impact of having a sales tax on food, prescriptions and services heavily used by working families.

    Our new bill will simplify the state's 1930s Depression-era tax code, provide substantial tax relief to working families and make the state more attractive to job-creating businesses. The plan will cut taxes by more than $1 billion in the first three years alone.

    This bill begins the process of eliminating the state personal income tax and eliminate the corporate income tax, business franchise tax, food tax and death tax - without expanding the sales tax on services.

    It will reduce the tax burden for the overwhelming majority of North Carolinians, including low income earners and retirees whose sole source of income is Social Security. And it will close special-interest loopholes and remove unfair and complicated deductions, credits and exemptions at the state level. The plan will protect vital state services like education, transportation infrastructure and public safety.

    The Senate compromise tax reform proposal will:

    •   Reduce the state personal income tax rate from the current maximum of 7.75 percent to 5.4 percent in 2014 and 5.25 percent in 2015;

    •   Create a new zero percent state income tax bracket for all taxpayers, applied to the:

    •   First $15,000 of income for those married filing jointly

    •   First $12,000 of income for heads of household

    •   First $7,500 of income for single filers

    •   Retain the state child tax credit;

    •   Phase out, then eliminate the corporate income tax by 2017;

    •   Phase out, then eliminate the business franchise tax by 2018;

    •   Eliminate local business privilege taxes in 2018;

    •   Phase out, then eliminate the food tax by 2016; and

    •   Eliminate North Carolina's death tax.

    After listening to feedback from constituents, small business owners, other legislators and the governor, Senate leaders decided against expanding the sales tax to services that are not currently taxed.

    From the start of this process, we said that elected officials should not pick winners and losers through our tax code. The House plan of taxing mechanics and repairmen in order to give tax cuts to lawyers and lobbyists is not a fair policy.

    We made a historic first step in fundamentally reforming our state's archaic tax code and reinvigorating our economy. Our compromise plan incorporates feedback from folks across the state, provides much-needed tax relief to North Carolina families of all incomes and propels our state from the bottom of national rankings to the 6th best business tax climate in America. This fair compromise will put more money in everyone's pockets and get more North Carolinians back to work.

    Currently the House and Senate are in negotiations trying to find a tax plan that both bodies are happy with.

    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.

    Contact Information

    My office contact information is shown below. If you like my newsletter, share it with your friends. If not, let me know and you will be removed from our distribution list.

    Mailing Address:

     300 N. Salisbury Street, Room 525
     Raleigh, NC 27603

    Phone: (919) 715-8293  •  Fax: (919 754-3296