It's tax time in Raleigh. No, the General Assembly has not moved up your filing deadline, you've still got until April 15 to get your taxes done.
But this week Republican leaders in the North Carolina House and Senate did unveil their tax plans for this legislative session. Reporter Tom Bullock and Morning Edition host Marshall Terry discuss.
MT: Both plans call for more tax cuts in North Carolina. But there are some key differences in these plans.
TB: Namely the size of those cuts. And that's a pattern we've seen before. The House tends to call for more modest cuts and the Senate likes to go big. This time the House is calling for $461 million in tax cuts for individuals and businesses over two years.
The Senate, well, here's how Republican Tommy Tucker of Union County put it. "We're proposing a billion dollar middle class tax cut."
TB: And to be clear Marshall, that's a billion dollars over two years and that total includes sizable cuts for businesses and the corporate tax rate.
MT: How so?
TB: The Senate plan would cut the corporate income tax rate down to 2.5 percent by 2019. Which, Tucker said, "will make North Carolina's rate the lowest in the U.S. for those who have a corporate income tax."
TB: The House also has some tax cuts for businesses but it mostly focuses on reducing franchise taxes and giving tax breaks for companies that buy heavy machinery.
MT: What about individual tax rates?
TB: The House would leave the current income tax rate at 5.49 percent. The Senate wants to drop that to 5.35 percent.
And both chambers want to expand what's known as the standard deduction. That's the amount of personal income not taxed in un-itemized returns. Right now that's set at $17,500.
The House would raise it to $18,500 for a married couple filing jointly.
The Senate would up that to $20,000 and increase the amount of mortgage interest and property taxes a married couple could deduct from their taxes if they don’t qualify for the standard deduction.
In addition the Senate plan would remove the cap on how much can be deducted for charitable contributions. That's something the House plan doesn’t address.
MT: In the past sales taxes have been increased while the income taxes were cut. Any calls for that to continue?
TB: As of right now, no. Both the House and Senate plans leave the sales taxes as they are.
And the budget writers of both chambers say they can still pay for promised teacher pay increases with the cuts they have proposed. We'll see how the number shake out once the actual budget debates begin later this year.