“AARP North Carolina recognizes the need to update our state’s tax structure to better foster a vibrant and health economy. To do so, this tax structure must be stable, efficient – and, most importantly, fair. The Senate Committee Substitute to House Bill 998 does not meet these standards. Instead, it jeopardizes the ability of seniors and hard-working families to pay their bills and make ends meet.
The Senate bill proposes new taxes on Social Security – the bedrock of financial security for seniors in retirement. Seniors who live on fixed incomes already face rising costs for the basic necessities, including utilities, nutritious food, housing, and health care. They are not able to pay higher taxes.
AARP believes Social Security should not be subject to state taxation, and strongly opposes any tax on Social Security benefits by the State of North Carolina.
Most states throughout the country recognize how critical Social Security is to seniors’ financial security in retirement – and do not tax this critical source of income. After all, seniors worked hard their entire lives, paying in to Social Security through their tax dollars; they should not be taxed again.
Although the Senate tax proposal, which is a committee substitute to House Bill 998, has only been available for a few days, AARP moved quickly to get information from numerous trusted budget and tax sources so that it could analyze how taxing Social Security benefits would impact North Carolina seniors. Calculations by some of the sources indicate middle-income seniors would see a tax increase under the proposed plan.
In addition to taxing Social Security, AARP has further concerns about the tax proposal because it would take away a large chuck of revenue from the state budget. AARP believes that any tax reform package passed by the Legislature must be revenue neutral in order to avoid additional and drastic cuts to the vital services that hard-working North Carolinians count on – like education, public safety, transportation, and services that help vulnerable seniors remain independent in their homes and communities. Such a significant loss of revenue could also hurt North Carolinians at the local level, through higher
Bottom line: the Senate tax proposal is a bad deal for seniors and hard-working North Carolina families.”