Cook talks taxes, teachers at Republican Club meeting

Published 5:53 pm Monday, May 27, 2013

On the heels of the North Carolina 2013-2014 budget passing in the Senate, N.C. Sen. Bill Cook spoke to the Beaufort County Republican Club last week about the upcoming changes to state taxes.

The tax reform package is hailed as being the largest tax cut in state history and, according to Cook, the shift from income tax to sales tax will spur the economy.

“We have the highest tax rates and tax burdens in the Southeast,” Cook said, adding that the high rates have prevented the state from recreating new businesses. “That’s one of the thing’s that hurting us.”

Cook laid out a Senate plan that would, over time, eliminate state income tax altogether, he said. Currently, personal income tax falls under three rates: 6 percent, 7 percent and 7.75 percent. The new plan would reduce the rate to a flat rate statewide, with the N.C. House advocating for a 5.9 percent flat rate; the Senate, 5.5 percent in 2014, 5 percent in 2015 and 4.5 percent in 2016.

According to Cook, taxpayers would also pay no taxes on the first $10,000 of personal income in 2014; first $12,500 in 2015 and 2016; and first $15,000 in 2017.

“After that, hopefully, we’ll move into no income tax at all,” he said.

The Senate plan also calls for a reduction of corporate taxes from 6.9 percent to 6 percent over three years, and estate tax will be eliminated altogether.

Putting the burden of tax on sales rather than income will spread that sales tax over a larger tax base, he said.

But many believe the plan to broaden what is taxed under sales tax may, in fact, hurt businesses and individuals alike. Under the plan, services such as haircuts, landscaping, labor costs, attorney and doctor visits, in addition to over 100 other services, will be taxed.

On the budget, Cook said that the current budget, unlike in previous years, is balanced and sets the groundwork for tax reform: “Things we need to do and what it would be nice to do.”

He went on to tell the audience that the Republican-dominated General Assembly will be making changes that affect teachers and the public schools.

“Tenure’s going away,” he said. “We’re going to find the teachers who do a good job and pay them for it.”

He also talked about grading each school as a whole and expanding the ability for parents to choose which schools their children attend.

“So there’s no doubt about it, that’s going to include a whole lot of changes in the way our children are taught,” Cook said.