NC Senate District 46 May 28, 2021 Update
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"For the past decade, North Carolina has led the nation in tax reform policy under Republican leadership, and as a result our state’s economy is booming and state revenues are at an all time high. As we enter a new decade, I look forward to continuing the philosophy of reducing the tax burden on our citizens, so that they can keep and spend more of their hard-earned money, rather than government."- Senator Warren Daniel
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Friends,
This week Senate Republicans just unveiled a major tax cut proposal in House Bill 334 that would result in a 21% income tax cut for a family at the median household income ($54,000.00) in North Carolina. As co-chairman of the Senate Finance Committee, I was a part of the team of Senators who developed this proposal, which would reduce the personal income tax rate from 5.25% to 4.99%, while increasing the standard deduction (zero-tax bracket) from $21,500 to $25,500. The proposal also raises the child deduction from $2500 to $3000 per child. Thus, a family of four with two children earning $40,000 would pay zero income tax on the first $31,500 of earnings.
The past 10 years of responsible Republican budgeting has left North Carolina in better shape than just about any state in the country. Our philosophy has always been that when state government has a surplus, we should use that surplus for two things, tax cuts to our citizens and to increase the funds in the Rainy Day fund.
Also, many of you may be interested in how North Carolina is going to address the issue of PPP funds deductibility. The Senate version of HB334 addresses this issue by creating an automatic grant program to all businesses that received some sort of federal or state assistance, including PPP loans. The grant will provide a direct payment to each of these businesses of 7.5% of the state/federal assistance payment, up to $250,000, for a maximum grant amount of $18,750. This grant should cover all income tax liability tax for businesses who received up to $250,000 in federal and state COVID assistance.
Finally, H334 includes a provision to add $1.3 billion to the Rainy Day Fund over the next two years, which would bring the total savings in that fund to about $3.1 billion. As you know, this fund has been critical to addressing the needs of our state as we have experienced two major hurricanes and an earthquake in the past 5 years. These funds will replenish the Rainy Day fund so that it is available for future unexpected needs of our state, including a future recession.
I expect the bill to pass the Senate sometime next week, and I hope the House will quickly concur with the proposal. The full proposal, including a good summary of the bill can be found here: House Bill 334
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A few years ago, I was able to stand and make a few remarks on a resolution that honored several deceased service members. Included was the fourth-generation Army soldier, Specialist Jacob Carroll, who died while serving in the Middle East theater. The resolution coincided with Memorial Day weekend, so I decided to quote from the Army Code of Conduct that I learned during my time at the US Military Academy. I include here a portion of those comments because the Code speaks to the commitment that all service members have to the job they’re called to do:
“I am an American, fighting in the forces which protect my country and her way of life. I am prepared to give my life in their defense. I will never surrender of my own free will… I will never forget that I am an American fighting for freedom, responsible for my actions, and dedicated to the principles which made my country free. I will trust in my God and the United States of America.”
This weekend don’t forget to honor the men and women that have died in the service of our nation, and the families that have suffered loss. May we never forget their sacrifice. Enjoy the holiday weekend.
--Warren Daniel
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