Raleigh, N.C. — With tax day just eight days away, state Democratic leaders held a news conference Tuesday to accuse Republican leaders of misleading the public about their 2013 tax overhaul.
That overhaul doubled the standard deduction on state income taxes and lowered the tax rate from a progressive tiered scheme of 6, 7 and 7.75 percent to a flat rate of 5.8 percent for all income – a modest cut for workers who earn less but a generous one for the state's highest earners. The corporate tax rate was cut from 6.9 to 6 percent for the 2014 tax year.
However, the overhaul also repealed many tax deductions and credits taxpayers have been able to claim for years, from medical expenses and college tuition to child care and small-business income. Those changes have come as an unpleasant surprise to some taxpayers preparing their returns due next week.
Republican authors of the reform said most people, although not all, would end up paying less. But Democrats say they've heard plenty from constituents of both parties who did not come out ahead. They're accusing GOP leaders and Gov. Pat McCrory, who signed the legislation, of cutting deductions for the middle class to pay for corporate and high-income tax breaks.
"We’re hearing from people across the board about the damage that’s been done by this Republican majority and this Republican governor," said Rep. Susan Fisher, D-Buncombe. "Gov. McCrory and the Republican legislature are costing them dearly, and they deserve to know who was prioritized ahead of them."
"People feel duped by this governor and the legislature," said Sen. Mike Woodard, D-Durham. "They were promised the largest tax cut in history. Instead, they’re paying more and watching millionaires get a break on their yachts and their jets, and that’s just wrong."
House Minority Leader Larry Hall rattled off a list of GOP measures he says have hurt lower-income families: higher gas taxes, expanded sales taxes, cuts to unemployment benefits and the sunset of the state's Earned Income Tax Credit after Republicans declined to extend it.
"Over the next five years, Gov. McCrory will give away a billion a year to North Carolina’s wealthiest individuals and largest corporations," Hall, D-Durham, said. "In fact, two-thirds of the money will go to individuals with incomes over $900,000 a year. Who’s paying for it? Middle-class families and workers."
The state Republican Party issued a emailed response to the Democratic press conference.
"Gov. McCrory signed historic tax reform into law which puts more money into the pocketbooks of working North Carolinians as well as small businesses, but the North Carolina Democrat Party continues to launch attacks based on the same old liberal talking points," executive director Todd Poole said in the statement. "The fact is the Democrat Party wants to bring North Carolina back to the high tax, big government system that has failed North Carolina in the past.”