Amid outcry that the Republican-backed proposal would disproportionately burden low- and middle-income families, the House gave first-round approval to a phased-in plan to lower income tax rates for both individuals and corporations. The individual tax would drop from its current 4.7% rate to 3.7% over the next 10 years, resulting in an annual loss of revenue for state coffers of more than $148 million, based on preliminary figures. And state revenue would have to grow by $175 million per year in order to trigger the yearly decreases of 1%. The corporate tax also would be reduced a quarter point to 3.75% and the state portion of the capital gains tax would be eliminated, costing another $330 million annually.
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