NC lawmakers approve tax bill

jfrank@newsobserver.comJuly 17, 2013 

— North Carolina lawmakers gave final approval Wednesday to a major tax bill even as new figures indicated that not everyone may benefit from the plan.

House and Senate Democratic lawmakers pointed to a provision in the legislation that ends a $50,000 business tax break targeted to small businesses. About 60 percent of business owners who qualify for the current tax break may see a tax hike, averaging $1,150, according to a new legislative analysis. Another 23 percent would get a tax break, and 17 percent of the people who now qualify would break even.

A married couple with two children who run their own business and make less than $253,000 would likely see the tax increase, the analysis showed. The same family making more would still likely see a tax break, helped by other provisions of the bill that cut personal income taxes from the current three-tiered rate to a flat 5.75 percent in 2015.

“I’m afraid (the small businesses) come up on the short end in many cases,” said Sen. Gene McLaurin, a Rockingham Democrat.

The scenario amplified the concerns Democrats highlighted a day earlier showing that not all taxpayers will save money under the plan – a main selling point from Gov. Pat McCrory and GOP lawmakers. The opponents of the plan used it to press their argument that the bill benefits the wealthy more than lower- and middle-class taxpayers. They also contrasted the corporate tax rate cut to 5 percent in 2015 against the treatment of small businesses.

Republican leaders unveiled the measure less than 48 hours before the House gave it a final nod with at 77-36 vote and the Senate follow suit by a 32-17 tally. It goes to the governor this week for his expected signature.

Republicans responded to the latest concerns about the bill by noting that Democrats opposed the $50,000 tax break when it passed two years ago. At the time, critics didn’t like that wealthy lawyers and lobbyists could also claim the credit.

Senate leader Phil Berger said the tax bill treats taxpayers more fairly by eliminating specific breaks for certain interests. “One of the choices that we had to make is did we want to do something that was a little more broad-based that applied to more people,” he said.

Other GOP lawmakers pointed to different numbers showing many scenarios in which people would see an income tax cut.

State Rep. Bert Jones, a Rockingham Republican, rejected critics’ attempt to “demonize the people at the top” by saying the bill only helps the wealthy.

“Many of these are business. These are the people that create the jobs in this state, the much-needed jobs in this state,” he said.

Frank: 919-829-4698

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