It will, if those retirees who read Forbes magazine focus on a new article from Ashlea Ebeling. Ebeling doesn’t like everything about the plan, but she and her headline writer offer a generally positive review.
There are the Great Smoky Mountains, the Outer Banks and the Research Triangle, and now there are three new tax reasons for retirees to pick North Carolina, thanks to a major tax reform deal.
Here’s how the plan will help retirees:
- The plan will lower income tax rates to a flat rate of 5.8% in 2014 and 5.75% in 2015. In the current three-tiered system, the top rate of 7.75% kicks in on earnings over $60,000 for a single and $100,000 for a couple, and the second tier 7% rate starts at with earnings of just $12,750 for a single and $21,250 for a couple. Further rate reductions could be triggered by revenue growth in 2016 and 2017.
- The plan will abolish the state estate tax retroactive to Jan. 1, 2013. Currently, North Carolina has a generous exemption of $5.25 million per person that matches the federal estate tax exemption. North Carolina’s move will bring the tally of states where you have to worry about a separate state estate or inheritance tax down to 19 states–plus the District of Columbia. For a rundown including an updated interactive map on Where Not To Die In 2013, click here. Abolishing the state estate tax was one of Republican Governor Pat McCrory’s campaign promises.
- The plan will continue to exempt Social Security income from state taxation. That was one point of contention during the months of wrangling over competing tax reform bills, with the AARP and other groups lobbying to keep Social Security payouts state income-tax free.
As John Hood reminded us earlier this week, tax reform is one piece of a broader plan to boost North Carolina’s economy.
