Dalton rips big tax break for business, McCrory calls for broader reform

McCrory takes no position but promises broader reform

dkane@newsobserver.comJune 8, 2012 

Lt. Gov. Walter Dalton, the Democratic nominee for governor, has ripped Republican lawmakers for passing a $336 million business tax break last year while simultaneously cutting money to public schools that led to hundreds of teacher layoffs.

“This tax break should have been limited solely to small businesses, which are the backbone of our economy,” Dalton said in a statement. “For the Republican leadership to create a loophole for wealthy corporations and big firms and hide in a small business tax cut while firing teacher(s) is insulting and harmful to small business across our state.”

Republican nominee Pat McCrory, a former mayor of Charlotte, offered no opinion on the tax break. He focused on the need for comprehensive tax reform.

“Instead of the political back and forth going on in state government over important issues like taxes, we should focus on fixing and modernizing our current tax code, which was largely written in the 1930s,” he said in a statement. “Instead of short-term fixes and incentives to try and spur job growth, I will work with both Democrats and Republicans to enact long-term tax reform that allows existing businesses to create jobs and allows us to compete with neighboring states for manufacturing jobs.”

The News & Observer asked Dalton and McCrory about the tax cut after publishing a story Sunday that showed it was not just for small businesses, as Republican legislative leaders announced, and that it would also provide a roughly $3,500 annual tax break to lawyers, doctors and other owners or partners of businesses of all sizes.

The tax break’s cost is one of the largest in recent years, and came at a time when lawmakers laid off roughly 6,400 employees through budget cuts. It is expected to help 460,000 business owners or partners.

The cuts and the tax break were all in the state budget lawmakers passed last year. A cap that would have limited the tax break to businesses with revenues of less than $825,000 had been in earlier versions of the budget bill, but was dropped as the legislation made it to the floors of the House and Senate for a final vote.

This week the state House passed its budget bill for the upcoming fiscal year that begins July 1 without taking any action on the tax break. House Speaker Thom Tillis, a Cornelius Republican, had said in an interview for the Sunday story that he thought the break was only for small businesses.

Jordan Shaw, a spokesman for Tillis, said Friday that the House plans no changes to the tax break. He said it was “nearly impossible” to have any exemptions from a tax policy such as the one in last year’s legislation, which shields the first $50,000 in income from taxation for the owners and partners. “The fact is that this measure is providing some relief to small businesses in our state – and that’s a good thing,” he said.

State Sen. Bob Rucho, a Matthews Republican and a top tax writer in the Senate, said his chamber also would not make any changes. He contacted The N&O after the newspaper sought a comment from Senate leader Phil Berger, an Eden Republican.

“We don’t plan to make a change because we think this is the best way to stimulate the economy and create jobs,” Rucho said.

Kane: 919-829-4861

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service