by Donna Martinez
Former Senior Writer and Editor, John Locke Foundation
The N.C. Senate budget plan includes a $1 billion tax cut over the biennium. JLF’s Joe Coletti details the changes here. Take a quick look and then read the whole piece. It includes lots more great information about the Senate’s restrained spending plan.
Personal Income Tax
Reduces the personal income tax rate from 5.499 percent to 5.35 percent, a 2.7 percent reduction
increases the Standard Deduction from $8,750/$14,000/$17,500 to nice, round numbers: $10,000/$15,000/$20,000
changes the child tax credit to a phased tax deduction that results in higher tax savings for those in the lowest income tiers
adjusts the cap on the mortgage interest and property tax deduction to a tiered deduction based on income with a ?maximum allowable deduction of $22,000, instead of $20,000. My back-of-the-envelope calculation suggests that, at the average property tax rate of $1.08 per $100 valuation, an owner with a 5 percent interest rate would ?need an average outstanding principal more tha n?$325,000 over a year to exceed the $20,000 cap