Final approval of tax overhaul could come Wednesday (video)
Both the NC House and Senate wasted little time Tuesday in giving preliminary approval to the tax overhaul plan introduced a day earlier by Governor Pat McCrory.
When Rep. Joe Sam Queen suggested the tax proposal was not a job creator and simply an effort to eliminate taxes for the wealthiest North Carolinians, Republicans introduced a motion to end any further debate in the state House.
Queen’s assessment was echoed as well by Budget & Tax Center director Alexandra Sirota, who described the tax package this way on The Progressive Pulse:
‘The loss of deductions and exemptions and the fact that the benefits of the rate reduction disproportionately benefits the wealthiest taxpayers results in certain taxpayers losing just under the income tax changes. For example, if you send your children to child care and once were able to claim the child and dependent care credit, its loss in this plan could make your income tax bill increase. Or perhaps you own a small business; the $50,000 business income deduction is eliminated under the tax deal. Other ways that your income tax load goes up, loss of the Earned Income Tax Credit, no more medical expense deduction, loss of the personal exemption, loss of the standard deduction for seniors and the deduction for retirement income.
Of course, there is also the sales tax expansion. This will impact low- and middle-income taxpayers both directly and indirectly as these taxpayers spend more of their annual income on taxable goods and services. It is also true that businesses, no longer benefiting from sales tax exemptions, will pass on a portion of their increased sales tax to the consumer in the form of higher prices.’
Despite those concerns, it’s expected both chambers will give final approval to the plan Wednesday, sending House Bill 998 on to the governor’s desk.