A Tar Heel Tax Cut at Last
VERBATIM
It is refreshing to reach a compromise on something that we worked so
hard on and more so when national recognition is given. Copy and pasted
below is an article from the Wall Street Journal on July 16, 2013:
"After months of deliberations and legislative slips and slides, North
Carolina's Republican governor, Pat McCrory, and the GOP leaders who run
the House and Senate have finally reached a deal on tax cuts. The plan
is an impressive trifecta that will slash the personal income tax to
5.75% from 7.75%; cut the corporate tax to 5% from 6.9%; and eliminate
the state death tax.
"This is a big deal for growth, and we still think we can come back in
the next couple of years and get the rates even lower," says state
Senate President Phil Berger. More than anyone, Mr. Berger gets credit
for making this cut happen when it looked like it might die a slow
death. State think tanks like the Civitas Institute, which provided the
intellectual ammunition, also deserve praise.
Along the way there were lots of impasses. The Senate had originally
passed a more ambitious tax bill with a flat, 4% income tax rate and a
gradual phase-out of the corporate and franchise taxes. The plan would
have eliminated income tax deductions while squeezing out the exemptions
from the sales tax. But the special interests, especially the housing
lobby, revolted, and that plan died in the House.
The deal was held up in the House for more than a month in part because
the Republican speaker, Thom Tillis, fretted about the revenue losses.
Our sources tell us that Mr. Tillis wouldn't accept tax rates as low as
the Senate wanted to go because he wanted to preserve higher levels of
spending. According to one Raleigh political insider, "Tillis fought to
save every carve out for special interests in the state, including the
realtors, big hospitals, and developers."
The good news is that in the end the House relented to the compromise package announced Monday. (As for Mr. Tillis, he's currently running for the U.S. Senate seat now occupied by Democrat Kay Hagan).
Eliminating the estate tax is also significant. If North Carolina wants
to attract "snow bird" retirees from the North, and pull them away from
Florida, it helps to have a policy that doesn't tax seniors if they die
in the state. As important is improving the state's business climate.
"We had the highest income tax rates in the South, and this is hurting
business here," says the governor. "This tax reform plan is a major step
in restoring confidence in the economy so that employers start hiring
again, and it will help us continue to attract new employers.""
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