Top Senate Republicans detailed a much-anticipated plan Tuesday to overhaul the state’s tax system by cutting personal and corporate income taxes in exchange for a broader sales tax applied to everything from haircuts to car repairs.
Senate leader Phil Berger, an Eden Republican, said the forthcoming legislation would trim the personal income tax from the highest 7.75 percent rate to 4.5 percent over three years and cut the corporate income tax from the current 6.9 percent to 6 percent.
The combined local and state sales tax would fall from 6.75 percent to 6.5 percent, but it would apply to hundreds of services currently exempted, including prescription drugs. The food tax would increase from the current 2 percent to the full sales tax rate, more than a three-fold increase.
The plan represents a retreat for Senate Republicans who earlier this year announced intentions to eliminate personal and corporate income taxes, a proposal also floated by Gov. Pat McCrory on the campaign trail. And many questions remain because lawmakers have not filed the exact legislation yet. Full story.