Senate puts toe forward on tax reform
RALEIGH — Woo hoo! I'm going to save $650 a year!
What? You haven't plugged your income, your dependent information and your tax filing status in the new tax calculator set up by state Senate leaders to determine your tax savings under their tax reform proposals?
Well, go forth. You can find it at www.nctaxcut.com.
Besides that tax calculator, you can hear Senate leader Phil Berger, in a video, selling the plan. The website also lays out the broad strokes -- big reductions in the personal income tax, a slight reduction in the sales tax while that tax is expanded to cover more than 100 services, and small cuts to the corporate income tax and business franchise tax.
Maybe "plan" is too concrete a term. Despite coming up with the calculator to estimate individual taxpayer savings, Senate leaders have yet to release a detailed piece of legislation.
That is not surprising. As I pointed out in a column a few days ago, this is some pretty scary stuff for a group of folks (by that, I mean all politicians) who live their lives kind of like cats, avoiding downpours and tepidly stepping out whenever there is any change in the wind.
Putting one's name to a tax plan is a lot like a cat asking to be tossed into a swimming pool.
So, Berger et al deserve some credit. Maybe they should receive some points for transparency, too.
After all, that tax calculator, if its assumptions are correct, is unlikely to make a big chunk of the populace jump for joy.
What it shows is that the plan would mean a tax hike for poorer families and big savings for the wealthy.
Among the results: a family with two children earning $30,000 would pay $1,000 more in taxes; the break-even point, for that same two-child family, would be about $40,000; a two-child family earning $200,000 would get a $4,200 tax cut; and the savings for a two-child family with $1 million in earnings would be $53,750.
These kinds of numbers handed Democrats and the left plenty of ammunition. They deemed the plan an attack on the working class.
The proposals may do just as much harm to families earning up to $150,000 a year.
Berger and Senate leaders like touting that the proposal would cut taxes by $1 billion over three years. They seem to have missed that this overall tax cut may do more damage to the middle-class than any pluses or minuses to individual tax bills.
My family, for example, gets its $650 annual tax cut. Meanwhile, eliminating one-twentieth of the state's general operating budget creates more pressure to raise university tuition, to increase fees at parks, to cut public school dollars that are made up with fees and local fundraisers.
Legislators are right that the state's tax structure needs revising. If they don’t want to be accused of being reverse-Robin Hoods, they need to concentrate on the sales tax, and expanding the base while lowering the rate.