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Rucho resigns as finance chairman over tax disagreement

Posted June 13, 2013

— The Senate's leading proponent of rewriting the state's tax code has resigned a key chairmanship in protest over the tax reform plan his chamber is pursuing, saying that special interests have cowed other political leaders.

Sen. Bob Rucho, R-Mecklenburg, wrote to Senate President Pro Tem Phil Berger resigning his post Thursday morning.

"When you stand on a certain principle and see how things are going another way...you have to say it's time to do something else," Rucho told WRAL News.

In his letter, Rucho told Berger that they had "a fundamental disagreement on the most effective model of tax reform and management of that legislation."

Berger replied to Rucho via his own letter Thursday, saying only that he refused to accept Rucho's resignation. A spokeswoman for Berger said the Senate's top leader had no other comment.

Rucho has spent much of the year rallying support for rewriting the state's antiquated tax code. Key to the plan he put forward are big cuts to corporate and personal income taxes paid for by relying more heavily on sales taxes. Rucho's plan would have expanded sales taxes to between and 130 and 160 services. His plan also advocated for treating manufacturers more favorably under the tax code. 

Basing state revenue on "consumption taxes" levied when people buy things rather than when they earned money would spark economic growth, he said. 

"There seems to be resistance from the Governor's Office and the Speaker's Office" to that idea, Rucho said. 

For Rucho's plan to work, the state needed to close a number of tax breaks for specific industries. In total, there are $9 billion in "tax expenditures" that represent favorable tax treatment of specific individuals and industries. In December, Rucho warned that the effort could "turn into the Lobbyist Full-Employment Act."

Rucho said Thursday that prediction had apparently come true.

"It seems like the special interests got in the way, and that's a shame because they're causing everybody's taxes to go up," he said. In his letter, Rucho placed that blame squarely at the feet of House Speaker Thom Tillis and Gov. Pat McCrory.

"It is a huge disappointment that the Governor and the Speaker of the House did not provide the leadership or have the political backbone to fight the special-interest groups, who favor loopholes over a fair tax system," Rucho wrote. 

Tillis said that Rucho appeared to be speaking out of frustration. 

“This simply appears to be frustration that adequate support could not be generated for this particular tax plan in the Senate. The House, meanwhile, passed a tax reform plan last week. We’ll continue to work with the Governor and the Senate toward the common goal of tax reform," Tillis said.

The House tax reform plan shares some aspects in common with the Rucho bill. It expands sales taxes to certain services and pares back income taxes, but it is far less sweeping than the Rucho bill. Earlier this week, Berger rolled out his own tax bill, which contains no expansion of the sales tax base and closes only a handful of loopholes.

The Senate Finance Committee passed Berger's proposal Wednesday, and it was expected to be debated on the Senate floor Thursday.

84 Comments

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  • oldaltar Jun 14, 3:52 p.m.

    I am afraid that many of you will have to learn the hard way. It is going to take some heartaches for many of you to come to terms with the truth. However there will be some who will never change. Their minds have been seared. We are truly living in times where evil is called good and good is called evil. However, I am thankful for God's Grace in this matter.

  • bill0 Jun 14, 12:06 p.m.

    "I wasn't aware that all the poor people in Florida died. You libs are amazing at spin and lies"

    Florida has no income tax, so they have an infinite exemption, not 15k.

    They also exempt food and medicine for their sales tax to ease the burden on the poor.

    Besides that, the state of florida is heavily subsidized by the rest of US taxpayers due to the large number of SS and medicare payments flowing there for retirees. They also soak tourists with their sales tax and various use taxes. Without those things, the florida economy would collapse under their current tax plan.

  • junkmail5 Jun 14, 11:39 a.m.

    if you'd like a more specific number though- Anyone making under $169,000 will pay MORE in taxes under this bill.

    Which is about 95% of people in North Carolina.

  • arfamr1008 Jun 14, 11:32 a.m.

    Rucho's plan was horrible. The current senate version is much better, but still needs to be significantly tweaked to make it revenue neutral and to keep it from being so tilted against the poor and middle class.

    The easiest fix would just to be to increase the standard deduction from the proposed 15k and build that back into the flat income tax rate. If we want to reduce reliance on government programs, it really doesn't make any sense to raise taxes on the poor.

    bill0

    June 14, 2013 9:07 a.m.

    Report abuse

    I wasn't aware that all the poor people in Florida died. You libs are amazing at spin and lies

  • arfamr1008 Jun 14, 11:30 a.m.

    I think either way, the new tax code will be an improvement- arfamr1008

    For rich people? Yes, a big one.

    For litterly 95% of the state though it'll be a tax increase.

    You know, the thing the republians claim they hate.

    junkmail5

    June 14, 2013 9:21 a.m.

    So now it's 95%. When did your talking point change? More junk comments from junkmail

  • HeadsUp Jun 14, 10:53 a.m.

    Senator Rucho failed utterly to sell his longshot plan to a skeptical public and his own divided colleagues.

    He seemed to think he could pass radical legislation by fiat, or by the power of his sheer self-perceived brilliance.

    Foolish assumptions + arrogant posture + a bad plan + terrible execution = epic fail.

    Let's hope that more levelheaded lawmakers will pass signifcant, reasonable tax reform this year. It would be a shame for Dentist Rucho's massive misfire and subsequent tantrum to kill reform we really do need.

  • junkmail5 Jun 14, 9:21 a.m.

    I think either way, the new tax code will be an improvement- arfamr1008

    For rich people? Yes, a big one.

    For litterly 95% of the state though it'll be a tax increase.

    You know, the thing the republians claim they hate.

  • corncop Jun 14, 9:19 a.m.

    arfamr1008--At the moment, it seems the only m0 Ron's are the Republikook leaders who rode the millions in special interest financing into office and are now proceeding to pay those folks back! Not legislate for the betterment of this state or it's citizens!

    You realize that aliput5's comment was made in jest? Don't you? The Senator would have to come in disguise. No "good" Republican would be caught dead rubbing elbows with that rabble exercising their rights to free speech, peaceable public assembly, and the non-violent protest of their elected government's actions! Or did you not learn that the Constitution applies equally to all citizens???

  • bill0 Jun 14, 9:07 a.m.

    Rucho's plan was horrible. The current senate version is much better, but still needs to be significantly tweaked to make it revenue neutral and to keep it from being so tilted against the poor and middle class.

    The easiest fix would just to be to increase the standard deduction from the proposed 15k and build that back into the flat income tax rate. If we want to reduce reliance on government programs, it really doesn't make any sense to raise taxes on the poor.

  • arfamr1008 Jun 14, 8:52 a.m.

    Sen. Rucho, I would like to personally invite you to Moral Monday. We are a diverse group composed of those who differ with our current General Assembly and its leadership.

    aliput5

    LOL!! Moral Monday's aren't about morality...they're about people like William Barber stirring the low-information voter pot.

    This issue is indeed one that needs to be addressed, but the m0 Ron monday protesters are hardly the ones to address it.

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