By L.A. Williams, Correspondent
Christian Action League
July 18, 2013
RALEIGH — North Carolinians should get to keep more money in their pockets when April 15 rolls around next year, thanks to historic tax reform legislation passed Wednesday.
“I genuinely believe these efforts will go a long way in creating real jobs and prosperity for North Carolinians,” said the Rev. Mark Creech, executive director of the Christian Action League.
The first major alterations to the state tax code in some seven decades; the package of changes replaces the three-tier personal income tax system with a flat tax of 5.8 percent in 2014, with the rate to decrease to 5.75 percent in future years. It raises standard deductions to $7,500 for singles, $12,000 for heads of households and $15,000 for married couples.
The new structure also cuts corporate taxes from 6.9 percent to 5 percent by 2015, with a goal to decrease the rate to 4 percent in 2016 and 3 percent the following year if the state meets revenue targets.
In addition to repealing the estate tax, the plan caps the gas tax until June 30, 2015. It keeps the child tax credit in place, increasing it for those making less than $40,000, and caps deductions for mortgage interest on first homes at $20,000.
Americans for Tax Reform President Grover Norquist said the plan will “provide significant and much-needed tax relief for individuals, families, and employers across North Carolina.”
North Carolina had one of the worst business tax climates in the nation, the organization contends, but reported that now that the tax overhaul has been approved, “the state will have one of the best.”
Passed mainly along party lines, the Tax Simplification and Reduction Act (H 998) drew criticism from Democrats, who claimed it was mainly aimed at helping wealthy people and corporations.
“I cringe when listening to these arguments because they are steeped in a socialistic mentality that insinuates making a profit is somehow a vice,” said Dr. Creech. “Capitalism works, while socialism with its philosophy of redistribution only creates a culture of shared poverty. This is where we’ve been too long.”
He said contrary to what some claim, poverty is not solely or even characteristically created by the rich exploiting the poor.
“Poverty is complex. It can come from exploitation, but it also comes from misfortune, indigence, sloth and addiction,” he added. “It is impossible to ease poverty or eliminate it through a continued division of the economic pie into increasingly smaller pieces.”
Instead, Dr. Creech said what’s needed is a bigger pie.
“I think that is exactly what our current leadership in North Carolina is attempting to create with their new policies,” he said. “I am thankful and urge them, Godspeed.”
Rep. David Lewis (R-Harnett), one of the primary sponsors, said the measure was a step toward “getting our fiscal house in order.”
“Letting everybody keep more money in their pocket creates economic growth and creates opportunities for people to better themselves, to take care of their families, to meet their obligations,” he said. “We believe it is a fair and equitable way to finance the needs of this state.”
Governor McCrory is certain to sign the measure.
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