TODAY'S BIG STORY: Republican lawmakers outlined a proposal Wednesday to revamp the state’s tax system, offering a slew of reforms that would radically shift the tax burden in North Carolina. The proposal would eliminate personal and corporate income taxes in exchange for higher state sales taxes levied against groceries, medical expenses and other currently tax-free services.
SUPPORTERS SAY: Senate leader Phil Berger said the moves are necessary to modernize the state’s tax code and kick-start a struggling economy. He pointed to the state’s tax rates, saying the current 6.9 percent corporate tax rate and 7.75 percent personal tax rate for the highest earners are among the highest the region. “It is important for us in terms of our competitive posture with other states,” the Republican from Eden told reporters. “It is important for us in terms of making sure there is a fair allocation of the cost of government.”
CRITICS SAY: Critics caution that the proposals represent a fundamental change in who pays the state’s tax burden, and economists said that low-income people would feel the brunt. “For this particular proposal, the responsibility would shift from rich households and prosperous corporations to poor households and smaller businesses,” Dave Ribar, a professor at UNC-Greensboro, concluded in his analysis of the proposal.
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