Senate Tax Proposal Would Slash $2B from NC Budget Over 5 Years
Details of the NC Senate tax proposal are slowly starting to emerge - and it doesn't look good for working families. The NC Senate wants to again slash corporate and income taxes, while expanding the sales tax base, a move that benefits the wealth at the expense of middle and working class North Carolinians.
North Carolinians would pay less when they file their income tax returns and more at the cash register under a tax proposal rolled out by the state Senate's Republican leadership this week.
The net effect of the changes would be a cut in overall state revenues of $2 billion over the next five years, but higher sales taxes at the local level could mean the state's taxpayers would save far less than that overall.
And, Asheville and Buncombe County's five other incorporated towns would get significantly less in sales tax revenue than they would under current law.
The plan would cut corporate taxes and the personal income tax rate, but increase the amount the state brings in via sales tax as the sales tax would be extended to some services that are exempt today and some loopholes — including an exemption for nonprofits — and caps on sales tax owed would be changed.
Counties would be allowed to raise the local sales tax by half a cent per dollar of purchase if voters approve in referendums.
The Senate plan would phase in a new formula for distribution of sales tax revenue in which population would determine where most of the money goes. Currently, the governing factor is where the tax is collected, a method that favors commercial centers like Asheville.