House legislators have passed a tax reform plan in a committee hearing that would establish a flat personal income tax.
House Bill 998 is one of three competing proposals to reform North Carolina's tax code. Republican representative David Lewis is the bill's main sponsor.
"All North Carolinians get a personal income tax break," Lewis says. "It eliminates the three tax brackets that we have and establishes a fair flat 5.9 percent rate. That tax is a lower rate than most all of our neighboring states."
The plan would reduce corporate taxes from 6.9 percent to 5.4 percent over five years. It would also lower sales taxes to 6.65 percent in most of the state.
Republican leaders have patched over a disagreement about deductions for mortgage interest. The plan caps those deductions at $25,000. The bill now heads to the House floor for consideration.
A competing plan in the Senate would also lower personal and corporate income taxes but it would add more than 130 sales taxes.
