Senate gives tentative approval to tax cut
Republican backers say the measure will spark job growth. Democratic opponents say the measure will require service cuts in order to curb taxes for corporations and wealthy individuals.
Posted — UpdatedAfter voting 32-15 Tuesday, Senators will vote a second time on Wednesday before sending the measure back to the House, which has pushed its own version of a tax bill this session.
"I wish we could get more, but I'll take what we can get," Sen. Buck Newton, R-Wilson, said.
But the Senate bill still raises $1.5 billion less than the House plan would over the next five years, a gap that has been a sticking point in negotiations.
"There's been a good deal of work done on trying to find some common ground," Senate President Pro Tem Phil Berger said.
The measure drew condemnation from Democrats, who said it amounted to a tax cut for businesses and high-income earners that will come at the expense of lower-income citizens.
"This bill is not tax reform," said Sen. Josh Stein, D-Wake. "This bill is a tax cut to the wealthy and out-of-state corporations."
Stein blasted the measure as not providing sufficient money for government services.
"Will we ever give the teachers of North Carolina pay raise again?," he said. "They're already 48th (in the nation). Do we want them to be 50th?"
That prompted Sen. Jerry Tillman, R-Randolph, to dismiss Stein as championing "liberal giveaway" programs.
"That money will be spent in the economy," Tillman said of the tax cuts.
Another focus of attack for Democrats were provisions in the bill that would cap the sales tax refund for nonprofit corporations at $2.85 million per year. That amount of refund would require a nonprofit to spend $40 million per year before they would exceed the cap on sales tax refunds.
Sen. Dan Blue, D-Wake, said such a rule "penalized success" of big nonprofits such as WakeMed and Rex Healthcare. Only about a dozen health systems and two universities – Duke and Wake Forest – would end up paying some sales tax under the rules.
"The ones that are above that threshold are institutions that are organized as nonprofits but are institutions that pay their (top) employees ... six- and seven-figure salaries," said Berger, R-Rockingham. "Those institutions, we felt, probably could withstand this."
The state House is not in session this week, so it was not immediately clear how top leaders in that chamber would react to the Senate bill.
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