House Tax Reform Plan Examined in Committee | Eastern NC Now

For Immediate Release:

    RALEIGH, NC     Members of the House Finance Committee heard the details of the House tax reform plan this week. House Bill 998, The Tax Reduction and Simplification Act, would establish a reduced flat income tax of 5.9% for all North Carolina taxpayers. As a further reduction, the first $12,000 of personal income would not be taxed at all. Currently, taxpayers pay an average of 6.7% income tax, starting with first dollar they earn. The state’s child tax deduction would increase from $100 per child to $250 per child for most taxpayers.

    The draft legislation says that, “The State's reliance on temporary and expedient tax changes to meet budget shortfalls has created a tax structure that is unpredictable for taxpayers and a revenue stream that is unstable for the State.” The goal of the measure is to reform the state tax code for the first time since the Great Depression.

    The measure does not increase taxes on food or medications, and does not tax Social Security benefits. It also reduces the amount that higher income taxpayers may deduct for charitable donations, and caps the sales tax exemptions for non-profits at $5 million. The end result of the plan is an overall tax cut, encouraging much needed economic growth in North Carolina.

    The measure is considered the first step toward eventually ending the state’s reliance on an individual income tax, and transitioning toward a consumption tax code. It is scheduled to be heard and voted on by the Finance Committee next week.

    Contact: Hazel Speciale (919) 733-5853