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On May 29, 2026, North Carolina announced a new taxation plan aimed at increasing state revenue and providing relief for low-income residents. The plan, introduced by Governor Sarah Bradley, includes several key changes to the state's tax system.One of the most significant changes is the implementation of a graduated income tax system. Under the new plan, individuals with lower incomes will pay a lower tax rate, while those with higher incomes will face a higher tax rate. This is intended to provide relief for low-income individuals while ensuring that those with higher incomes contribute their fair share.In addition to the new income tax structure, the plan also includes an increase in the state's sales tax rate. The current rate of 5.25% will be raised to 6%, with the additional revenue used to fund education, infrastructure, and other key state programs. Governor Bradley emphasized that the increase in the sales tax rate would be offset by the reduction in income tax for low-income individuals, resulting in a fairer and more balanced tax system.Another key component of the new plan is the introduction of a tax credit for families with children. Under this provision, families will receive a tax credit for each child under the age of 18, providing much-needed financial assistance to parents and guardians.Overall, the new tax plan is expected to generate significant additional revenue for the state while also providing relief for low-income residents. Governor Bradley expressed confidence that the plan would help to address budget shortfalls and fund essential state programs without placing undue burden on low-income individuals.The plan will now go to the state legislature for approval, where it is expected to face strong opposition from Republican lawmakers. However, Governor Bradley remains hopeful that the plan will ultimately be passed into law, paving the way for a fairer and more equitable tax system in North Carolina.