Faith and Health Summit 2022 Mindful Together
  • Skip to primary navigation
  • Skip to main content
  • Skip to footer

NC Council of Churches

Strength in Unity, Peace through Justice

  • Voices
  • About
    • Overview
    • Staff
    • Members
    • Covenant Partners
    • Issue Statements
    • Governing Board
    • Careers
  • Programs
    • NC Interfaith Power & Light
      • NCIPL Overview
      • Faith in Action NCIPL
      • NCIPL Articles
      • NCIPL Resources
      • Upcoming Events for NCIPL
      • Contact NCIPL
    • Partners in Health & Wholeness
      • PHW Staff
      • Mini-Grants
      • PHW Collaborative Pledge
      • Faith and Health Summit 2022 Mindful Together
      • The Overdose Crisis: The Faith Community Responds
      • Mental Health Advocacy
      • BIPOC Mental Health Grant
      • Growing Communities of Inclusion: A Faithful Response to HIV
      • Healthy Aging
      • Citizen Science
      • PHW Articles
      • FAQs
  • Priorities
    • Racial Justice
    • The Overdose Crisis: The Faith Community Responds
    • Gun Violence Prevention
    • Criminal Justice
    • Immigrant Rights
    • Public Education
    • Farmworkers
    • Legislative Advocacy
    • Christian Unity
    • Peace
  • Events
  • Resources
    • COVID-19 Resources
    • Publications & Reports
    • Raleigh Report
    • Lectionary
    • Sermons
  • Donate
  • Council Store
  • Show Search

Search NC Council of Churches

Hide Search

Tax Cards on the Table

Steve Ford, Former Volunteer Program Associate · July 2, 2013 · Leave a Comment

The saga that North Carolina legislative leaders like to describe as tax reform could be at the beginning of the end. Or is it the end of the beginning?

After weeks of jockeying with the House, and with Gov. Pat McCrory sending signals of his own, the Senate now has approved a tax-cutting plan that President Pro Tem Phil Berger casts as a final, conciliatory effort to solve the tax reform riddle.

The new plan drops some previous ideas that clearly weren’t going to fly, such as making Social Security benefits liable to state income tax, eliminating the income tax deduction for all charitable contributions and reinstating the state sales tax on food. It’s closer to the House tax reform vision, and thus could be a realistic basis for compromise. That could allow legislators to settle on projected revenue figures and finish work on the state budget – their main item of unfinished business this session.

Still, the Senate plan, given tentative approval on July 2, can’t be regarded as a done deal. The House will have to sign off on changes developed by senators with their own set of priorities. The Republicans who control both chambers and governor’s office share a commitment to lower taxes and lower spending, but they’ve been all over the lot as to how to get there.

House leaders and Gov. McCrory have been wary of cutting taxes so deeply that a government already shrunken due to recession-related budget cuts will lose even more of the revenue it needs to meet its obligations. That’s an entirely valid worry – so valid, in fact, that even the somewhat smaller tax cuts the House favors would be harmful.

The Senate would cut the personal income tax to a flat 5.75 percent. That would do away with the tiered brackets that now help distribute the tax load fairly, with those making the most paying a somewhat higher share. The corporate income tax would be phased out altogether by 2018. The sales tax, which House members have wanted to expand to cover various services, would be broadened through the repeal of exemptions.

The Cost of Cuts

The argument for tax cuts is that they’d make North Carolina more attractive to employers and thereby spur the creation of jobs – no small matter in a state with the nation’s fifth highest unemployment rate, and one that has just slashed unemployment benefits.

But according to legislative staff, the Republican majority’s plan would mean a hit to state revenues of an estimated $171 million in fiscal 2013-14, approaching $1 billion in 2016-17. (See the fiscal note here.)  At a time when many state programs and services, notably at every level of education, have been squeezed relentlessly as revenues shrank during the recession, that money could be put to very good use. North Carolina teachers, for example, could be given reasonable pay raises instead of being forced to watch their pay drop toward the bottom of the national barrel. The state could stop trying to get by on the cheap with mental health care.

Here’s a summary of some other key provisions in the latest Senate tax plan, which is a rewritten version of House Bill 998:

  • Keeps income tax deduction for Social Security benefits. (Same as House plan.)
  • Gives taxpayers who itemize deductions the same deduction for charitable contributions that they’re able to claim on their federal tax returns. (Same as House plan.)
  •  Eliminates special charitable contribution deduction for non-itemizers – not something that charitable organizations such as churches should welcome. (Same as House plan.)
  • Allows taxpayers who are married and filing jointly to deduct up to a total of $15,000 for mortgage interest and real estate property taxes. (House favors $25,000 cap.)
  • Steps down corporate income tax from current 6.9 percent to zero in 2018. (House would reduce to 5.4 percent.)
  • Keeps state sales tax at 4.75 percent; does not expand to cover food and medicine. (Same as House plan.)
  • Keeps 2 percent local sales tax on food. (Same as House. A previous Senate plan would have dropped the tax, giving local governments a reinstatement option, but this drew widespread complaints because of the effect on local revenues.)
  • Increases sales tax on manufactured and modular homes to the general 4.75 percent rate. The rates are now 2 percent with a $300 maximum and 2.5 percent, respectively. This looks like a tax burden shift that would hurt lower-income homebuyers. (House wouldn’t change current rates.)
  • Steps down the sales tax refund that non-profit organizations can claim. By 2018, the refund would be capped at $2.85 million per year. That represents a significant change from an earlier Senate plan putting the cap at $100,000. Supporters of rural hospitals especially argued that they’d be hurt by the lower figure, which also would have affected large churches and those in the midst of building campaigns. (House wouldn’t impose cap.)

At the NC Council of Churches, there’s no enthusiasm for tax measures making it harder for non-profits to fulfill their mission, or those that shift tax burdens away from high-end earners. And the overall thrust of tax reform as it’s taking shape in the General Assembly would not be so much to update a tax code dating from the 1930s, when the state’s economy looked much different. It would be to cut taxes, plain and simple, and limit the growth of government.

Who would be left with the short end of that deal? The Moral Monday protesters know the answer.

— Steve Ford, Volunteer Program Associate

Filed Under: Blog

About Steve Ford, Former Volunteer Program Associate

Much goes on in North Carolina's state capital that's important to the Council of Churches. I'm glad to have a chance to help follow the action, transitioning from my career with The News & Observer of Raleigh, where I retired in 2012 as editorial page editor. I'm originally from Virginia but have lived in Cary so long I remember the Kildaire Farm barn.

Read more of my commentary here.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Footer

Contact

NC Council of Churches
27 Horne St.
Raleigh, NC 27607
(919) 828-6501
info@ncchurches.org

Facebook

Partners in Health and Wholeness

Featured

Tax Cards on the Table

Latest Tweets

Join us for our @healthandfaith Faith and Health Summit! Our theme for this year’s summit is Mindful Together. We want to acknowledge the need for mindful moments that hold our minds, bodies, & spirits. Join us and a well-rounded list of expert speakers: ncchurches.ourpowerb… pic.twitter.com/WSnA…

Yesterday

RT @NCCADP We have so much planned to mark the anniversary of NC's last execution. Read all about it on our blog and make a plan to join us as we say: Never again! #deathpenalty bit.ly/3C0lZkf

About 4 days ago

With the growing threat of the climate crisis, NC is looking toward new ways to get to zero carbon emissions. Last week, @NCIPL staff members Susannah Tuttle & Ren Martin attended a public hearing in Charlotte. wfae.org/energy-envi…

About 5 days ago

RT @MomsRising Moms of color don't have adequate break time or private space to pump. Urge lawmakers to support breastfeeding & working mothers! moms.ly/3Qi3gnN _ Las mamás de color no tienen un tiempo de descanso adecuado o un espacio privado para bombear. #NBM22 #IPumpedHere #PUMPAct pic.twitter.com/V3Yw…

About 6 days ago

Welcome our newest staff member, Ren Martin, NCIPL & Eco-Justice Connection Program Coordinator! Ren aims to uplift and empower people to create a more sustainable future for us all. We are excited Ren has joined our team! pic.twitter.com/3VLZ…

About 2 weeks ago

Follow @ncchurches

Latest Tweets

RT @ncchurches Join us for our @healthandfaith Faith and Health Summit! Our theme for this year’s summit is Mindful Together. We want to acknowledge the need for mindful moments that hold our minds, bodies, & spirits. Join us and a well-rounded list of expert speakers: ncchurches.ourpowerb… pic.twitter.com/WSnA…

Yesterday

Do you know what grant is right for your faith community? Check out the graphic below to learn about the differences between grants. Click here to learn more informationhttps://www.ncchurches.org/programs/phw/phw-mini-grants/ pic.twitter.com/umXb…

About a week ago

RT @FaithCompassWFU If we look at the HIV epidemic as an opportunity to bring healing, justice, and equity to those who have been marginalized and impacted by the health industry and society at large, we can generate more good in our communities. #breakthestigma #faithcompassWFU pic.twitter.com/FPIB…

About 2 weeks ago

RT @ncchurches This month we are excited to announce our @healthandfaith Interim Co-Directors: Jessica Stokes & Nicole Johnson. Jessica & Nicole have dedicated their hard work to supporting faith communities across NC. They will continue to do this work while overseeing the PHW program. pic.twitter.com/SU8Q…

About 2 weeks ago

RT @ncchurches This July, during BIPOC Mental Health Month, we invite faith communities of color to think about programs, initiatives, and ideas that will lift up BIPOC Mental Health and use the grant money @healthandfaith will offer to make that idea come to light! ncchurches.org/bipoc… pic.twitter.com/DMwT…

About 2 weeks ago

Follow @healthandfaith

Latest Tweets

RT @interfaithpower 🧵1/The Senate voted to pass the single biggest climate & clean energy investment in our nation’s history! Read statements on the passage from the IPL network: interfaithpowerandli… #Faiths4Climate #GetClimateDone

Yesterday

RT @interfaithpower Join us tomorrow for a discussion about encouraging our #faith communities to #vote by offering sermons, divrei Torah, and khutbahs on the importance of #voting. Register at ow.ly/W6so50K5kqI #FaithClimateJusticeVoter #Vote2022 #VoteReady #Faiths4Climate #interfaith pic.twitter.com/6Ecw…

Yesterday

Press Conference happening now #CLT #NCCarbonPlan #FossilFreeNC pic.twitter.com/Rizq…

About 2 weeks ago

RT @ClimateNexus Faith-based organizations, including @CreationJustice and @NCIPL, are hosting an evening of discussions and workshops on building climate resilience on August 18 from 5 pm to 8 pm ET. Register here: bit.ly/resiliencesum… pic.twitter.com/fuz8…

About 2 weeks ago

RT @averydavislamb Preachers and pastors! This weekend when you pray for and preach on the heat waves, wildfires, and other disasters, try mentioning that these are intensified by climate change. Here's what I've been praying...

About 3 weeks ago

Follow @ncipl

Latest Tweets

Copyright © 2022 NC Council of Churches · All Rights Reserved · Website by Tomatillo Design · Hosted by WP Engine