Should decisions about how the money you earn is spent be decided by:
A) You and your loved ones in kitchen table conversations, or
B) In committee meetings in Raleigh by self-interested politicians who have never met you
That question is at the heart of every debate about government taxes and spending.
In a move that would mark another gradual shift toward giving you control over more of the money you’ve earned (and to improve the economy so that you earn more money), the NC Senate this week approved a tax relief bill estimated to save taxpayers roughly $2 billion over the next two years.
Highlights from the bill include:
- Reducing the personal income tax rate from 5.25 percent to 4.99 percent and increasing the standard deduction by about 20%
- Phasing out the state corporate income tax, currently at 2.5%, over the course of five years
- Reductions to the franchise tax
- Grants to businesses negatively impacted by Gov. Cooper’s economic shutdown
As reported at WRAL.com, bill sponsor Sen. Paul Newton (R-Cabarrus) said:
“…a married couple filing jointly with two children making $38,000 a year would see their tax burden decrease by 50%, while a family making $200,000 per year would see a decrease of just 7.1%,”
“Some 250,000 North Carolinians will be removed from the tax rolls altogether” by increasing the standard deduction, he added.
Critics of the bill are seizing on the corporate tax phase out, including claims that “92% of corporate taxes in North Carolina are paid by out-of-state corporations,” according to Sen. Wiley Nickel (D-Wake).
Of course, corporations don’t pay taxes. People do.
Workers suffer the largest consequences of state corporate taxes, mostly in the form of lower wages, and to a lesser extent in the form of higher prices for retail goods. When you hear “corporate taxes,” think “taxes on workers.”
Here’s hoping this bill gains traction so that hard-working North Carolinians get to decide how more of their money is spent, rather than that decision being made by politicians and bureaucrats in Raleigh.