Top leaders in the North Carolina Senate want to reduce the state’s already falling individual income tax rate even further than what’s already set to happen.
Senate leader Phil Berger and the chamber’s Senate Finance Committee chairmen are among those filing a bill on Wednesday that would lower the rate beyond what’s currently set to happen through the 2021 budget law.
That law lowers the rate in annual increments from its current 4.75% to 3.99% starting in 2027. The new Senate measure instead would reduce the rate more deeply each year, reducing it to 2.49% for 2027.
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Senate Republicans have argued previous tax rate reductions have been successful in helping taxpayers while generating commercial activity that’s still kept state government coffers full.
“We believe this tax package will return a significant amount of money to taxpayers while still maintaining the needed revenue to run the state smoothly,” said Sen. Paul Newton, a Cabarrus County Republican, said in a news release.
House Republicans would make a small change to the current tax rate reductions approved in 2021 in its state government budget proposal debated this week. They want to reduce the planned rate in 2024 from 4.6% to 4.5%. But the 2027 rate would remain 3.99%.