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Republican plan would cut income tax, increase services taxed


WILMINGTON, NC (WWAY) -- Big changes could be coming in the way you pay taxes. Senate Republicans are pushing for what would be the largest tax reform in the Tar Heel State since the Great Depression.

"Our tax code remains stuck in the 1930s," said Sen. Phil Berger, Senate President Pro Tempore. "Failure to reform our tax code has cost North Carolina. We're standing still while other states move forward."

In an attempt to energize the state's economy senate republicans are introducing a plan they say will reduce income tax rates.

"You may pay a little bit more," Berger said. "Everybody ought to pay something. Everybody ought to be treated fairly. Everybody has a responsibility to help pay for the cost of government."

Opponents of the bill that it shifts the tax burden from the rich to the poor. To help pay for the $1 billion income tax drop the overhaul would increase North Carolina's sales tax base to include more than 100 services ranging from haircuts to attorney fees, making it one of the broadest in the country. Some business owners affected do not like the plan.

"I do not want that," said Leslie Padgett, who owns a salon in Wilmington that would be subject to the proposed tax. "That means we would have to raise our prices, and in this day and time you can't really do that if you want to keep your clientele. They will find somewhere else, or they'll find somewhere a little bit cheaper or stretch out appointments a little bit longer. All of that comes in to effect when you raise a price."

The plan must also get support of House Republicans and Gov. Pat McCrory, who said today he looks forward to reading the plan.

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