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Liberal group releases report showing GOP tax plan benefits wealthy the most

The tax plan being considered by Republican lawmakers in the General Assembly is the most generous to the wealthiest North Carolinians while raising taxes on middle-income households, according to a new report from the N.C. Budget & Tax Center, an arm of the liberal N.C. Justice Center.

The center's report is designed to counter a study by Arthur Laffer and the conservative Civitas Institute that the GOP lawmakers are using as a blueprint for an overhaul of the state's tax code that includes a proposal to eliminate the personal and corporate income taxes.

"Carolinians while raising taxes on middle-income households," according to a summary of the center's report. "If implemented, a family earning $24,000 a year would see its taxes rise by $500 under the new tax plan, while one earning $1 million would get a $41,000 break. The wealthiest 20 percent of taxpayers will receive a significant tax cut – a cut paid for by shifting the tax load to 60 percent of the state’s taxpayers, primarily middle class and low-income households."

Titled "A 'Laffable' Plan for Tax Reform," find it here.

Morning Memo: Tax plan details emerge, N.C. sheriff won't enforce gun orders

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.

***You are reading the Dome Morning Memo, the source for all his North Carolina politics. Much more below.***

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