Senate Republicans rolled out their latest proposal for tax policy changes Thursday morning, days after House Representatives introduced their Tax Reduction Act of 2017.
The proposal out of the high chamber seeks to reduce the corporate tax rate to 2.75 percent, the individual rate to 5.35 percent, and increase the standard deduction to $20,000 for married couples filing jointly.
Tommy Tucker (R-Union), Jerry Tillman (R-Randolph), and Warren Daniel (R-Burke) joined Senate Pro Tem Phil Berger (R- Rockingham) at the General Assembly to tout the plan.
“We’re proposing a billion dollar middle class tax cut. That’s right. And under this plan 99 percent of individuals income tax payers in North Carolina will either receive a tax cut or ay zero income tax,” said Tucker.
The Senate plan would continue the downward tax trend lawmakers have pursued in recent years. GOP lawmakers have changed state tax policy since 2011, reducing corporate and individual rates, while increasing the standard deduction.
In a statement, NC Policy Watch called the proposal a tax cut for the wealthy and profitable corporations.
"The proposal unveiled this morning will do nothing to boost the wages of working people nor will it help connect rural communities to opportunity, despite Senators’ claims," NC Policy Watch said.
North Carolina had one of the highest corporate tax rates in the southeast at 6.9 percent. A news release from House Speaker Tim Moore (R-Cleveland) called the zero-tax bracket under Democrat control ‘meager’, at $6,000 annually for married couples, and $3,000 for individuals.
“This is by far the best tax cut package that I’ve seen. And my co-chairs and I and staff worked through 13 or 14 different scenarios to get that,” Tucker added.
Senator Tillman noted that North Carolina is one of the only states in the country projected to have a budget surplus this year. He echoed the sentiments of other Republicans, explaining that North Carolina’s business climate has improved in the years following the recession, due in part to a more welcoming tax structure.
The House proposal doesn’t cut taxes as significantly. The two chambers will work toward a compromise this spring in conjunction with passing a state budget.