North Carolina Senate Republicans propose billion dollar tax cut
RALEIGH (WTVD) -- Republican leaders in the North Carolina Senate proposed a two-year, roughly billion dollar tax cut Thursday that they said would mean 99 percent of taxpayers in the state would see a tax cut or pay zero taxes.
Senate Finance Committee Chairmen Jerry Tillman (R-Randolph), Andrew Brock (R-Davie) and Tommy Tucker (R-Union), said the personal tax rate would fall from 5.49 percent to 5.35 beginning in 2018.
"Instead of spending our taxpayers' hard-earned money, this proposal puts money back into the pockets of the hardworking families and small business owners who earned it while strengthening our tools for business recruitment and job creation," said Sens. Tillman, Tucker and Brock in a statement.
The proposal would also increase the standard deduction for taxpayers.
The standard deduction for married couples filing jointly would go from $17,500 to $20,000. Head of household would go from $14,000 to $15,000, and single would go from $8,750 to $10,000.
The plan also increases the existing child tax credit and increases the amount of the mortgage interest and property tax deductions and eliminate the marriage penalty for itemizers.
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Businesses would also benefit from the proposal.
The corporate tax rate would be cut by a quarter of a percent in 2018, from 3-percent to 2.75-percent; then again in 2019, taking it down to 2.5-percent.
"I don't think you can argue with a philosophy and a strategy of reducing corporate tax, because we're seeing corporations come here," said Sen. Tucker. "It's because of the tax environment we've created over the last six years."
Gov. Roy Cooper's camp fired back.
"Governor Cooper has called for tax relief that targets middle class families because we cannot continue tax breaks for corporations and the wealthiest at the expense of education and our future," said Ford Porter, a Cooper spokesman, in a statement. "Any cuts to the personal income tax should apply only to middle class families who are the North Carolinians really feeling the squeeze right now."
Sen. Floyd McKissick, a Democrat who also serves on the Senate Finance Committee spoke with ABC11 shortly after the plan was unveiled, saying he was anxious to study the proposal, but already weary of more tax cuts.
"I think the greatest concern is that our need is extremely high," McKissick said. "I mean right now we're still around 42nd in the country in teacher pay; we need to be in the middle ground. We still have needs for building bridges and roads and our infrastructure's woefully under-financed and inadequate at this time and we've got to find a way to address that."
But with Republicans vowing to follow through with increases in teacher salaries, Berger called what they have a proven strategy; he pointed to the half-billion dollar surplus in the state budget despite years of cutting taxes.
"The people have sent us additional money and now is the time not to be timid," said Tucker. "We need to give that money back to those taxpayers which will go back into the economy which will grow the sales tax base which will grow the income tax base and give people the opportunity to spend their own money versus the state spending it for them."
The Associated Press contributed to this report.
