After much debate among lawmakers concerning Republican-led tax reform, the House and Senate have signed House bill 998 which has now been sent to Gov. Pat McCrory for final approval.
The Governor will likely be in favor of this proposal.
The bill was passed 77-38 in the House and 32-17 in the Senate. Most voters cast straight ballots in support of their respective parties on this bill, and only two Democrats were in favor of the new provisions.
Under this tax plan, corporate income tax would fall from 6.9 to 5 percent and personal income tax would decrease from 7.75 percent to 5.75 percent.
These rates are less ambitious than the original Tax Fairness Act proposed by Phil Berger earlier this year, but are nonetheless a considerable win for Republican legislators.
The implications of Fair Tax oriented plans such as this bill are a polarizing subject of debate among Democrats and Republicans nationwide.
Republican advocates of the tax plan argue that bill would lower tax rates to be competitive with surrounding states and shift the burden of taxes from income to sales taxes.
Republicans emphasize that this plan will benefit small businesses and help stimulate the economy.
Democrats claim that Bill 998 would disproportionally shift the tax burden from high income earners to lower income earners, a strategy which they claim is unfair and not proven to facilitate economic growth.
According to policy analysts, over a third of the total income tax cut applies only to the top 1 percent of income earners who have average incomes of $940,000 a year.
Democrats also criticize the bill for lowering the amount of annual tax revenue, not broadening the tax base and failing to close corporate tax loopholes.