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Howard defends block of House tax reform bill

Posted June 5, 2013

Rep. Julia Howard, R-Davie, is defending her move to block the progress of House Bill 998, a tax reform plan backed by her caucus leadership. 

An amendment Howard ran in Finance Tuesday passed "with overwhelming support," she said, but was missing from the version of the bill that surfaced in Appropriations Wednesday. 

The tax reform package, sponsored by Rep. David Lewis, R-Harnett, and backed by House Speaker Thom Tillis, would put a $25,000 cap on the amount taxpayers can deduct for mortgage interest, charitable contributions, and local property taxes. 

Howard's amendment would remove the cap and restore the right to full deductions. That would increase the cost of the tax reform plan by an estimated half a billion dollars. 

Lewis pushed to keep the cap in place, arguing it would affect mainly taxpayers making over $100,000 a year.

But Howard, who is a realtor, said it would also hurt homebuilders.

Restoring the full deduction for mortgage interest “is very important to people in the homebuilding industry,” Howard told WRAL. “And also to allow people to deduct their local property tax, that’s a part of the building industry.”

“We’re in a very fragile economy with the building industry and we don’t need to do anything right now that would hurt them,” she said. 

Howard denied rumors that she is trying to kill the tax reform plan: "Absolutely not."

"There’s a way you can do tax reform and not penalize the homeowners that we have contracts with,” she said. “Most of them are in 30 year mortgages, and we told them that this [deduction] is a part of that. It’s not right for us now to take it out and arbitrarily pick winners and losers on tax reform.”

“You’re gonna hear from other folks that I created a $450 million hole in the budget. That isn’t true," she said Wednesday. "The budget is one document and the tax reform is another. They’re not tied together." 

"You can bring the tax rate from 5.9% [in the bill] to 6.1%, and you’re revenue-neutral,” she said.  

For people paying only 6% now, she said, blended rates would allow a small tax reduction for everyone. "It’s an easy fix."

Howard said she also feels strongly about removing the cap on charitable contributions. “At a time when we’re asking the private sector to do more and more, we should be attentive to that.”

House Republicans held a lengthy caucus meeting on the tax reform plan at lunchtime Wednesday.  There's no word yet when the bill will reappear.

4 Comments

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  • lovelarvae Jun 5, 2013

    "I have no problem with people that have been skating by now having to pay some of the cost of government"

    People who are "skating by" probably wouldn't be affected by a $25k cap on mortgage interest, property taxes, or charitible donations.

  • HeadsUp Jun 5, 2013

    The reasonable House tax reform plan is much better for the middle class and the *working* poor than is the radical Senate proposal, which RAISES taxes on families earning $40K or less.

    And taxpayers can't claim the modest mortgage interest deduction unless they itemize -- which most of us don't, but the very wealthy do for their first and second (and third, and fourth...) homes.

    Instead of subsidizing lavish personal excess, we should encourage the growth of small businesses across North Carolina.

    Some people oppose tax reform, period. Fine. But if you want it, the House approach is far superior.

  • whatelseisnew Jun 5, 2013

    "Half a Bill. Ouch. The 80% of NC that got their taxes increased can expect a bigger hike now. Be sure to thank Howard and her "overwhelming" GOP support."

    I have no problem with people that have been skating by now having to pay some of the cost of government. I would like to see income tax eliminated and see the State Constitution changed so that an income tax can never come back into existence. Have ONE sales tax on most everything except FOOD.

    Once more people HAVE to ACTUALLY pay, they might be less eager to have Government doing stuff. It might even finally get people like Barber to wake up although that is doubtful.

  • 42_wral_mods_suck_i'm_gone Jun 5, 2013

    "Howard's amendment would remove the cap and restore the right to full deductions. That would increase the cost of the tax reform plan by an estimated half a billion dollars."

    Half a Bill. Ouch. The 80% of NC that got their taxes increased can expect a bigger hike now. Be sure to thank Howard and her "overwhelming" GOP support.