Senate Finance Committee Approves Tax Reform Bill

In a voice vote, the Senate Finance Committee this afternoon approved their latest version of tax reform.

The discussion was spirited throughout, and the room was jam packed with onlookers and media. Some highlights from the discussion:

• When discussing the potential negative impact on local government revenue due to the repeal of the local sales tax on groceries and local privilege taxes, Senate President Berger replied that counties will essentially have two choices: reinstate the local food tax or reduce spending
• Sen. Harry Brown stated that the status quo can not continue, and that NC’s current tax code just isn’t working. He used the specific example of auto manufacturing plants, pointing out that several other SE states have significant auto plants while NC has none
• There was consensus that NC needs to reform its tax code, it is just a matter of how to best go about changing it
• Sen. Berger added that NC has to do something, and the current Senate bill is “the something that’s available to us.”
• Sen. Rucho, the leading voice for tax reform in the Senate for several months, made lengthy comments in opposition to the bill, and voted against it. His opposition was based on his view that the tax plan does not go far enough to stimulate much-needed economic growth in NC. Rucho still favors the original plan that broadly expands the sales tax base, believing that better positions NC to ultimately eliminate income taxes – his ultimate goal. Among his comments: the current Senate tax bill “does not change the way we do business”; it is “not achieving comprehensive tax reform”; the bill represents “a stopgap approach that works against the direction we want to take;” and the bill “is not the right pathway…I can not support this bill.” Rucho added that if settling on this tax bill for political reasons like re-election is the main concern of the committee members rather than doing the right thing, then maybe none of them should be there.