Tax reform fires up both sides

July 15, 2013 9:00:00 PM PDT
The big tax reform package announced Monday by Gov. Pat McCrory is being touted by conservatives, and has been roundly panned by liberals.

From the moment they introduced it, Republicans have been saying this is a plan where everybody wins. However, Democrats ran the numbers. They say it's a bad deal for four out of five of people living in the state.

"If you pay income taxes in North Carolina, you are going to pay less taxes in North Carolina," said Dallas Woodhouse with Americans for Prosperity.

It's a claim that infuriates Democrats.

"That is not true.  This tax plan will not help everyone," said Alexandra Sirota, the head of the left-leaning N.C .Budget and Tax Center.

Sirota acknowledges that most people's income taxes will go down under the new plan. So will corporate taxes. However, by her math, taken as a whole, 80 percent of North Carolinians would pay more. Mostly because of an expanded sales tax, and other changes she says shifts the tax burden from the wealthy to the poor.

"There will be an impact for lower and middle class taxpayers," said Sirota.

The same themes played out in both the House and Senate Tuesday with Republicans calling it meaningful tax reform.

"Folks I represent want money in their pocket, and they'll decide where to spend it," said Sen. Jerry Tillman, (R) District 29.

Democrats are saying it is smoke and mirrors -- covering a massive tax cut to the wealthy.

"Ninety percent of the benefit of this bill goes to the top 5 percent in North Carolina," said Sen. Josh Stein, (D) Wake County.

However you see it, the tax changes do come with a price tag -- $500 million over the first two years, and more than $2 billion in lost tax revenue over the next five years.

Republicans say it will be worth it. They are promising the new plan will rope new jobs.

"We are going to be on the radar for companies coming to North Carolina," said Sen. Andrew Brock, (R) District 34.

Democrats say it will be worth it for a few people at the expense of everyone else.

Many had been concern that Social Security, food, and medicine would be taxed, but that is not the case in this bill.

Democrats say if you make $40,000, under the new plan, you'll save $80 on your income taxes. If you make $4 million, you'll save $70,000.

For Republicans, that breakdown makes good sense. For Democrats, it showcases the problem.

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