Tax proposals leave questions

May. 17, 2013 @ 09:01 AM

Thursday was a significant day for tax talk in North Carolina.

North Carolina House Republicans unveiled a tax overhaul plan that comes just a week after Senate Republicans put their plan on the table.

Additionally, Americans for Tax Reform President Grover Norquist was in Raleigh Thursday to start a two-day conference on the issue.

Both plans cut the state and local sales tax consumers, such as us in Rutherford County pay, decrease the corporate income tax and make the current three-tiered personal income tax structure one flat rate.

The three-year plan will also eliminate the estate tax and estimates indicate the plan will reduce taxes by approximately $1 billion.

So, where is the state planning to make that money up?

It will partially come from the expansion of items covered under the state sales tax such as groceries, prescription drugs and insulin.

The purpose of the plan, if you ask House and Senate Republicans, is to broaden the sales tax base so as to lower income taxes which is meant to encourage businesses to move to or stay in North Carolina.

In an Associated Press story, Senate Minority Leader Martin Nesbitt, D-Buncombe, said "They're cutting taxes for the wealthiest of the wealthy and paying for it by taxing vital services and goods for the middle class. This plan takes those struggling and makes life a little harder."

The North Carolina Justice Center concurred last week in a statement. They claim the Republican plan will hurt working families.

"By cutting income taxes and expanding the sales tax to more goods and services, the Senate leadership has pursued a shift in tax burden from the rich to the poor, not tax reform," the statement said.

Under the House plan, according to the Associated Press, the sales tax base will be expanded to cover "a handful of new services, such as from automobile repairs to warranty and service contracts."

Rep. David Lewis, R-Harnett, one of the House plan's chief authors said Thursday: "It will not create the extra burden on businesses that are not currently levying the sales tax."

North Carolina Gov. Pat McCrory has not endorsed either of the plans but said he was "encouraged" by the plan proposed in the House.

Growing business in the state is key part of economic growth. There is also little doubt that the state's tax code needs to be re-tooled.

But at what expense?

Both of these plans seem to shift money around and ask for even more from those families in North Carolina that are barely scraping by as it is now.

By Matthew Clark, for the Editorial Board

 

The Daily Courier Editorial Board consists of community members Jerry Brewer, Kyle Bingham, Tom Padgett, Dr. Shermaine Surratt and Cliff Strassenburg as well as Editor Matthew Clark