Yesterday North Carolina Governor Beverly Perdue revealed her proposed tax plan, which is designed to raise $1.6 billion in taxes. Here are some of the highlights:
- Reduce individual income tax rates, except for a two-year "emergency surcharge" on single taxpayers with income over $500,000 and married taxpayers with income in excess of $1 million.
- Reduce the corporate income tax from 6.9% to 5.9% beginning in 2011.
- Increase the gross premium tax paid by insurance companies to 2.25%.
- Stop the corporate income tax transfer to the public school capital fund.
- Apply the franchise tax to limited liability companies.
- Repeal privilege license taxes.
- Increase state sales tax from 6.75% to 7.75% through September 2011. Then rate would then decrease to 6.5%.
- Tax warranties, installations, repairs and some personal services.
- Tax recreation and entertainment, such as movies, concerts and amusement parks.
- Tax more online sales, courier services, and storage fees.
- Tax luxury services such as chartered jets and cosmetic surgery.
- Increase cigarette tax by 50 cents a pack, to 85 cents.
- Increase taxes on alcoholic beverages.
- Small business tax reduction
- Expanded college savings credit
- Create homebuyer's credit