Tags: north | carolina | income | tax

NC Looks to Scrap Income Tax

By    |   Thursday, 05 Sep 2013 02:41 PM

North Carolina is looking to become the eighth state in the union to be income tax-free with the Republican majority hoping to get the measure passed within the next two years.

State Senate Finance Committee chairman Bob Rucho says the top priority in the next biennial full session of the legislature is to replace income tax with a consumption-based sales tax.

"That's a direction we'd like to go," Rucho told The Washington Post as the state Senate adjourned for the year.

According to Rucho, North Carolina's income tax accounts for about 61 percent of state revenue, but it has been volatile in recent years because of the recession. That in turn makes it hard to plan the annual budget in a state that requires a balanced budget, he noted.

"We want to get away from that and go to a more flat consumption-based tax," he said. "And in return, we'll say, 'We'll go to zero with the income tax.'

"That's something we think we can achieve. It just takes time to get there."

North Carolina's Republican-controlled legislature has already implemented large tax cuts this year. Personal income tax rates will fall by two percentage points, from 7.75 percent to about 5.8 percent, while rates on corporate tax will drop from 6.7 percent to as low as 3 percent over the next several years.

Rucho is one of several legislators and governors in GOP-controlled states who are pushing for income tax reform.

"When it comes to getting pro-growth tax reform done this year, the only real opportunities are at the state level," Patrick Gleason, director of state affairs for Americans for Tax Reform, the Washington-based lobbying group headed by Grover Norquist, told Newsmax earlier this year.



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North Carolina is looking to become the eighth state in the union to be income tax-free with the Republican majority hoping to get the measure passed within the next two years.
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2013-41-05
Thursday, 05 Sep 2013 02:41 PM
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