- Associated Press - Thursday, March 26, 2015

RALEIGH, N.C. (AP) - Republican legislators who cut North Carolina income taxes in part by eliminating special treatment for targeted groups said Friday they’re going further, while others feel pressure to change course and restore some breaks.

A trio of state senators unveiled legislation they said will cut personal and corporate income taxes by $1 billion a year.

At the same time senators were floating their plan, the House was voting overwhelmingly to restore one of the targeted tax breaks previously discarded - one designed to encourage investors to rehabilitate old buildings.

House lawmakers this week also advanced plans to again allow seniors to deduct medical expenses. That came after seniors doing their taxes for the first time under the earlier tax overhaul learned they were unable to deduct high medical bills. The deduction would cost the state about $38 million a year.

“I wouldn’t make too big a deal over what the House does right now. We negotiate these things and will be right up until the budget is done,” said Sen. Jerry Tillman, R-Randolph. “You cannot do what we’re doing and keep all the special carve outs and tax breaks. You cannot do both.”

The Senate plan would cut the state personal income tax rate to 5.625 percent in 2016 and 5.5 percent in 2017. Corporations would see their income tax drop further, falling from 5 percent now to 4.5 percent in 2016 and 4 percent in 2017.

Married couples would pay no taxes on their first $17,500 of income in 2016 and first $20,000 of income in 2017. Single filers would pay zero income tax on their first $8,750 in 2016 and first $10,000 in 2017.

The proposal follows an initial round of tax cuts in 2013 estimated to cut available revenue by about $500 million that GOP lawmakers predicted would spur new business investment and job creation.

Tillman and his fellow senators did not provide an analysis that will be produced by legislative staff of how much the tax cut would cost or who would benefit the most. They deflected discussion of any resulting cuts from the state’s $21 billion budget, saying the lower taxes will allow consumers and businesses to spend more and expand the overall economy.

In the House, Republicans who have decried other targeted tax breaks said one for updating and restoring old buildings paid dividends, was applied in nearly every county, and added to an architectural heritage of brick textile mills and cigarette factories that was uniquely North Carolina.

The Historic Preservation Tax Credit stimulated more investment and tax revenue than they cost and led to jobs for hundreds of tradesmen, said Rep. Stephen Ross, R-Alamance, who sponsored the bill.

“You can’t put a calculation on the other things that this does for a community,” he said.

But the bottom line for other GOP lawmakers is that targeted tax breaks encourage spending that wouldn’t have happened without the state’s involvement.

“I want buildings to be developed that have significance. I’m just not ready to spend other people’s money,” said Rep. Dana Bumgardner, R-Gaston.

___

Emery Dalesio can be reached at https://twitter.com/emerydalesio .

Copyright © 2018 The Washington Times, LLC.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More

Click to Hide