35th Senatorial District
Phone Number: (919) 733-7659 North Carolina Senate
Room 1414 Legislative Building Raleigh, NC 27601-2808
FOR IMMEDIATE RELEASE May 30, 2008
SENATOR GOODALL VOTES TO REPEAL GIFT TAX
Pushes to abolish death tax
Senator Eddie Goodall (R- Union Mecklenburg) voted in the Senate Finance Committee Thursday to report favorably Senate Bill 1756 which would abolish the North Carolina gift tax. However, Sen. Goodall expressed his desire to go even further by also repealing North Carolina’s Estate, or “death tax.”
Sen. Goodall sponsored bills to eliminate both the gift tax and death tax three times in the past four years including this year’s Senate Bill 2088. In response to Thursday’s favorable report, which sends the bill to the Senate floor for a vote, Sen. Goodall said, “It’s high time we get rid of the gift tax. We shouldn’t penalize the middle class just for giving a gift to a friend or loved one.”
The gift tax accounts for roughly $17 million in tax revenue to the state each year. The death tax accounts for about $170 million per year in taxes.
The bill also makes a technical modification of the formula by which death tax is assessed, a change required to bring state law into compliance with the U.S. Constitution.
Goodall urged fellow senators to get rid of the death tax because it gives incentives for individuals to leave North Carolina and invest in states that have no death tax at all. He cited a February, 2008 report, published by the Connecticut Department of Revenue which has a death tax similar to North Carolina’s, which discovered a net migration of residents out of that state in recent years. According to the study, 52 percent of retirees leaving Connecticut did so “primarily” because of the state’s death tax. Over 76 percent left the state “in part” due to the death tax.
The report also concluded that states with death taxes suffer economically. In the categories of employment, personal income, and gross state product, states with death taxes rank lower on average than states with no death tax.
The death tax also hits small family businesses and farms especially hard. Senate Republican Leader Phil Berger (R-District 26) expressed his desire to simply abolish the death tax altogether. “When a small farmer or business owner dies, his family shouldn’t have to go out of business just to pay the state death taxes,” Sen. Berger said.
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