JLF’s Becki Gray lays out the consequential reforms passed by the General Assembly this year and signed into law by the governor.
Tax reform actually started in 2011, when a new Republican majority in the General Assembly allowed Democrats’ “temporary” one-cent sales tax hike to sunset, amounting to a $1.3 billion tax cut. They repealed the land transfer tax option, an additional tax on the sale of real property.
After that initial positive step, the General Assembly and a new governor got serious in 2013 about transforming a 70-year-old tax system. North Carolina now has a flat personal income tax rate — 5.8 percent for 2014 and 5.75 percent in 2015. No more higher rates for higher earners, just a simpler, fairer system.
The corporate tax rate (which was highest in the Southeast at 6.9 percent) will drop to 6 percent in 2014, 5 percent in 2015, and 3 percent by 2017, assuming the state government meets revenue targets. Dozens of carve-outs and special treatments were eliminated from the sales tax system. The death tax was eliminated.
These reformers deserve our thanks. They stood up to entrenched special interests, took the arrows that come with being a reformer, and have helped put North Carolina back on the path to prosperity.
