Updated on HB 998 – The Tax Simplification and Reduction Act Tax reform is a process, not an event. The Tax Simplification and Reduction Act is another important step in reforming North Carolina’s outdated tax system. We are continuing the work we started by reforming our unemployment tax structure, repealing the death tax, and instituting more than a billion dollars in tax cuts during the last budget cycle. The plan puts North Carolina on track for further tax reform efforts in the future. This bill is a major step in the ongoing process of much-needed and long-overdue tax reform. It begins the process of repealing tax loopholes and preferential tax treatment which favor specific industries within the State. Under the plan, the working families of North Carolina will see more dollars in their pocket, and our state will become more competitive for job creation. Americans for Tax Reform predicts that this plan would result in the state going from 7th worst, to the 19th best business tax climate in the nation. Under this plan, two-thirds of North Carolina tax filers will see an average personal income tax reduction of 20%. CUTS PERSONAL INCOME TAX BY $1.7 BILLION OVER THE NEXT 5 YEARS ALL North Carolinians get a Personal Income Tax Break Eliminates the current, three-tiered tax bracket system and places all North Carolinians on a flat, fair, 5.9% tax rate Lower tax rate than all neighboring states, except Virginia (by 0.15%) Helps Low and Middle-Income Earners by DOUBLING the size of the Standard Deduction The most vulnerable North Carolinians will retain an effective 0% Personal Income Tax rate North Carolina will have one of the most generous standard deductions in the country MORE THAN DOUBLES the Child Credit for Low and Middle-Income North Carolinians Increases child credit from $100 to $250 per dependent for families making less than $100,000 PROTECTS SENIOR CITIZENS AND FAMILIES BY KEEPING EXISTING EXEMPTIONS: Does not tax Social Security Keeps deductions for mortgage interest and property tax ($25,000 combined maximum). Deductions for charitable contributions remain unlimited. CUTS BUSINESS TAXES BY MORE THAN $900 MILLION OVER THE NEXT 5 YEARS Cuts Franchise Tax by more than 10%, and reduces Corporate Income Tax from 6.9% to 5.4% 5.4% rate would be the lowest in the SE, except for South Carolina. PROTECTS ESSENTIAL GOODS AND SERVICES Keeps exemptions from state Sales Tax for food and medicine to ensure they are affordable for all citizens. The plan only expands the tax to services that ALREADY collect and remit part of the Sales Tax, like warranties and service contracts.
Posted on: Fri, 14 Jun 2013 16:35:41 +0000
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