Uncategorized

Perdue’s revenue proposal: A greatest hits collection?

Today’s letter to lawmakers from Governor Perdue in which she lays out the terms of a tax package to help break the budget deadlock (the N&O has a link here) is another interesting and worthwhile contribution to the debate on Jones Street.

Though the headline item is her idea of an “emergency” 13-month, one-cent hike in the general sales tax, the plan is in many ways a compilation of provisions from her original plan, the Senate plan and the House plan – a greatest hits collection, if you will.

As with most “greatest hits” compilations, some “tracks” are stronger than others. On the positive side, the Governor’s plan would take steps to close corporate tax loopholes, places a 2-year surcharge on the income tax payments of those making over $500,000 per year, and broadens the sales tax base to include several categories of currently untaxed services beginning Jan. 1 2010. Moreover, the plan would raise more than $1.6 billion in the first year and over $1.7 billion in the second year, significantly more than the current targets being used by budget negotiators.

The less enjoyable tracks on this album include the fact that the 1% temporary sales tax hike plus the proposed increases in cigarette and alcohol taxes (by far the two largest sources of new revenue in the first year) mean that the plan will disproportionately impact low- and moderate-income taxpayers and the proposed 1 percentage point increase in the state EITC will fall well short of blunting this impact. Furthermore, a good case can be made that the temporary surcharge on top income-earners should be permanent because these taxpayers, even under the new plan that broadens the income tax base to adjusted gross income, will pay far less in taxes as a share of their incomes than low- and middle-income taxpayers.

On the whole, this greatest hits collection is worth a listen. Kudos to the governor and her team for putting forward a thoughtful plan for breaking the current deadlock that is the legislative tax debates.

Check Also

A public success story: North Carolina’s older adults are far less likely to live in poverty

According to data released last week by the ...

Top Stories from NCPW

  • News
  • Commentary

A pivotal legislative task force may be just beginning its dive into North Carolina’s school funding [...]

The controversy over “Silent Sam,” the Confederate monument on UNC’s Chapel Hill campus, has been ra [...]

North Carolina tries to mine its swine and deal with a poop problem that keeps piling up A blanket o [...]

This story is part of "Peak Pig," an examination of the hog industry co-published with Env [...]

With Republicans on Capitol Hill and in the White House desperate to post a big legislative win, the [...]

Latest court system mess is directly linked to the Right’s ideological war on public structures Some [...]

Republicans in Congress are rushing to advance a tax reform bill that balloons the federal deficit s [...]

The post Charitable donations and the GOP’s chopping block appeared first on NC Policy Watch. [...]

Spotlight on Journalism

We invite you to join a special celebration of investigative journalism! The evening will feature Mike Rezendes, a member of the Pulitzer Prize-winning Boston Globe Spotlight Team known for their coverage of the cover-up of sexual abuse in the Catholic Church.

Tickets available NOW!

Spotlight On Journalism

This event will benefit NC Policy Watch, a project of the North Carolina Justice Center. Sponsorship opportunities available now!

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more


NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more