NC lawmakers propose eliminating state income tax

NC lawmakers propose eliminating state income tax

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by AMY COWMAN / NBC Charlotte

Bio | Email | Follow: @amywcnc

WCNC.com

Posted on January 18, 2013 at 6:00 PM

Updated Friday, Jan 18 at 6:56 PM

CHARLOTTE, N.C. -- North Carolina is among the highest income tax rates in the region at 7.75 % personal tax and 6.9 % corporate tax rate.
How would you like to see that tax eliminated from your paycheck?
"It depends on how you spread it," said one uptown worker.
 
Republican lawmakers have proposed the legislation in hopes of kick starting a struggling economy. John Berens, Partner-in-Chief at Clifton Larson Allen, LLP says at face value it makes sense.
 
"Hopefully what happens -- is people have more income and they have more money to spend and it spurs growth,” said Berens.
 
For businesses and what it could mean for the state unemployment rate.
 
"It also creates jobs we have companies that may move out of state because of state tax burdens so if they stick around because of lower state tax burden that spurs growth," said Berens.
 
There would be an exchange, meaning a hike in sales tax rate for things like groceries and medical services and an added sales tax to currently exempt services like dentist visits, haircuts and more.

Not everyone loves the idea.
 
"I would rather see the income check return from what they take out of my check versus taxes going up on things like food and other things like that," said one uptown worker.
 
"You might hear concerns it's not a progressive tax, it's giving more benefit to those who make money and those who make less money are going to have a higher tax break," said Berens.
 
Berens says the only way to know if it'll be a good thing for you is to figure out how much you would get from no income tax versus how much you spend on groceries and other services.

 

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