Raleigh, N.C. — The House and Senate tax plans unveiled Thursday include common goals, such as driving down personal and corporate income taxes and closing loopholes.
They also are coming in for some of the same criticism. That criticism is likely to grow louder as outside groups have a chance to study the measures, but here are some initial reactions:
Alexandra Forter Sirota, Budget &Tax Center director:
The tax plans released today in the House and Senate Finance committees go down three different roads that all lead to the same place: tax cuts for the rich, higher taxes for everyone else and no benefit to the state’s economy.
That’s because the proposed shift away from the state income tax – the only state tax based on ability to pay – means higher sales taxes. These are the taxes that represent the greatest share of the incomes of middle-class and low-income North Carolinians.
Claims that income tax cuts will create jobs and boost the economy don’t hold up against other states’ experience. Instead, North Carolina will lose the resources needed to pay for things that businesses and families rely on, like our neighborhood schools and world-class universities.
Rep. Larry Hall, D-Durham, Democratic leader in the House:
The House Republican bill gives tax breaks to the wealthiest individuals and corporations in North Carolina while raising taxes on middle-class families. Under this Republican tax scheme, families who are already struggling to make ends meet would pay new taxes on car repairs, their electric bills and even trips to the movies. North Carolina needs a tax code that protects the middle-class and ensures everyone pays their fair share. The Republican proposal fails this basic test.”
Doug Dickerson, AARP of North Carolina:
Today, the House and Senate unveiled three bills to reform North Carolina’s tax code. These threaten the health and financial security of seniors and most families and are unacceptable. Any proposals that include new taxes on seniors, prescription drugs and food – the basic essentials of daily living for seniors and millions of hard-working North Carolinians – will face opposition from AARP members, and AARP will fight to prevent such legislation.
AARP members want to reform our tax system just as legislators do, but these so-called “reform” proposals are dead-end detours that won’t lead to economic growth for all.
Here are the facts:
• In North Carolina, 80 percent of low- and middle-income seniors rely on Social Security as their sole source of retirement income. Their average yearly benefit is $14,000.
• At the same time, these seniors spend 14 percent of their monthly income on prescription drugs and other out-of-pocket health care costs.
• North Carolina ranks among the worst states when it comes to adult hunger. One out of every 10 North Carolinians over age 50 is “food insecure,” meaning they risk going to bed hungry every night.
Food, prescription drugs and retirement income aren’t luxuries – they are the essentials of daily living. Seniors can’t afford to pay unnecessary taxes on these basic necessities – a fact recognized by most other states in the country. Today, only 10 states currently tax groceries, while only Illinois taxes prescription drugs.
We urge North Carolina lawmakers to protect seniors and hard working families – their health and financial security – not threaten their well-being.