The latest Senate tax plan continues to provide large tax cuts to the wealthiest taxpayers and profitable corporations, while shifting more of the overall tax load to middle-class families and reducing revenue for schools, health care and other services by nearly $1 billion each year when fully implemented. Yesterday, Senator Berger released the Senate’s latest tax plan after a week of negotiations behind closed doors with the House. While Senators state that many of the criticisms of their earlier bill have been addressed, the loss of revenue remains high.
In order to bring down the overall cost of the bill – from $1.3 billion to just under $1 billion under the new tax plan – the Senate plan shifts the tax load to the bottom 80 percent of taxpayers, who on average will see their taxes increase. This tax shift is a result of the combined impact of expanding the sales tax base to more goods and services, the loss of the personal exemption and the cap on itemized deductions. By contrast, the top 1 percent will see their taxes cut on average by nearly $11,000, with 56 percent of the total net tax going to the richest taxpayers.
The Senate tax plan fails to address the state’s upside-down tax system and actually makes it worse by skewing it even more in favor of the wealthy and profitable corporations. The significant reduction in revenue means further cuts to public education, health care, and public safety in the years ahead. A tax plan that shifts the tax load to low- and middle-income families is not a plan that promotes economic opportunity for all North Carolinians.