Jun 072013
 

Office of Representative DEAN ARP District #69 – UNION COUNTY

FOR IMMEDIATE RELEASE Friday, June 7, 2013

NC HOUSE PASSES COMPREHENSIVE TAX REFORM PLAN House Bill 998 reduces personal, corporate income tax rates

Raleigh – Republicans in the North Carolina House of Representatives today passed the “Tax Simplification and Reduction Act” on its second reading, delivering on their promise to comprehensively reform the state’s tax code. The 72-32 vote is the result of months of discussion around a tax system that was built on a 1930’s population model that has subjected North Carolinians to the highest income taxes in the Southeast. “Tax reform is not an event, it is a process,” said House Speaker Thom Tillis (R-Mecklenburg). “During our first session in the majority, Republicans in the House began that process by providing more than a billion dollars in sales tax relief. Today, we took another major step in that process by passing a comprehensive tax reform package that will provide across-the-board tax relief for North Carolinians.” House Bill 998 eliminates North Carolina’s three-tiered personal income tax bracket system (with rates currently at 7.75%, 7% and 6%) and replaces it with a flat 5.9% personal income tax rate. Under the plan, every tax filer would see a reduction in their personal income tax liability. The plan doubles the size of the standard deduction and increases the child tax credit from $100 to $250 for families making less than $100,000. The bill provides a $25,000 combined maximum deduction for mortgage interest and property taxes, while deductions for charitable contributions remain unlimited. Social Security benefits are not taxed under the plan. The measure also cuts business taxes, reducing the franchise tax by more than 10% and shrinking the corporate income tax from 6.9% to 5.4%. The plan would expand the state sales tax to only those services that are provided by entities that currently collect and remit sales tax revenue. Essential goods such as medicine and food would not be subject to the sales tax. “We have made a commitment to the hard working families of North Carolina with the Tax Simplification and Reduction Act to help them have economic freedom and ensure a better quality of life for their children and grandchildren,” said Rep. Dean Arp (R-Union). “This common sense tax reform plan is long overdue and I am proud of the have been a part of passing this historic bill in the House today, as it is another step in creating effective, efficient, and accountable State Government.” The bill is expected to receive final approval in the House on Monday, after which it will be sent to the Senate for consideration in that body.
 Posted by at 3:23 pm