House-approved budget includes boosted income tax deduction.
Income Tax Cut Could Be Coming
Carolina is closely watching tax reform efforts in the current legislative
session, and so far things are off to a good start. On May 18, the House voted
103-12 in favor of a $22.22 billion budget that includes an income tax cut.
the bill, the budget would increase the standard deduction taxpayers can take
on their personal income taxes. Taxpayers could deduct $1,000 to $2,000 more
depending on filing status, and the increase would be phased in gradually over
four years, starting in 2017. This measure would provide welcome relief for small
business owners filing their business taxes at the personal rate as
budget also included a provision to protect against future tax increases by
earmarking $300 million for the state’s rainy day fund.
Nelson Dollar, the House’s lead budget writer, told The News &
Observer, “Whenever the next recession comes, we need to make sure we have
sufficient funds so we’re not faced with tax increases or cuts to services.”