Laura Leslie has details about a tax plan proposal scheduled to be unveiled this morning by the NC House (my comments in italics):
House Finance chair Paul Luebke confirms a $940M revenue package will roll
out in his committee tomorrow morning. The highlights:
- A quarter-cent sales tax increase (permanent, not temporary) But I though we needed to "stimulate demand" to end the recession? Making it more expensive to buy goods will depress demand. People can't afford to pay more at the register, so sales tax hikes will force companies to offer products at lower prices – less revenue coming in to companies means they will need to cut back on expenses. This will cost jobs.
- The sales tax base would be widened to include warranties, installations,
- Income tax for $200K to $500K would go up a quarter half percent from 7.75% to
8.25%. For earners over $500K, it’s a half three-quarter percent increase
to 8.5%. (That’s two new tax brackets, if you’re playing along at home.) A great way to kill the golden goose. The top 6% of income earners pay almost half of all income taxes in NC . The income tax from these top earners alone make up roughly one-fourth of all state tax revenue
This will also have a serious negative impact on small businesses, as most businesses file the personal income tax return.
- Cigarette tax would jump 25 cents per pack (it’s 35 cents now).Sure, why not? We all know that all smokers are rich and can easily afford it (sarcasm/off). Some may quit, but those that don't will have less money to save or spend elsewhere in the economy because they are paying more for smokes. More jobs will be lost.
- Alcohol tax – there is one, but I don’t know details yet.
UPDATE: The cigarette tax estimated at $195 million has been removed from the tax package during Finance Committee negotiations today, according to Under the Dome.