THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 31, 1995 TAG: 9503310560
SECTION: LOCAL PAGE: B3 EDITION: NORTH CAROLINA
SOURCE: ASSOCIATED PRESS
DATELINE: RALEIGH LENGTH: Medium: 57 lines
Senate Democratic leader Marc Basnight agrees with House Republicans that personal income taxes should be cut by $237 million, but he wants to direct more of the relief to low- and middle-income taxpayers.
Basnight said Wednesday in an interview with The News & Observer of Raleigh that many of the state's wealthier residents will get a nice break when the General Assembly, as expected, repeals the intangibles tax on the value of stocks and bonds.
So, he says, the personal income tax cut should be reserved for those who have taxable incomes of less than $100,000.
``I'd like someone making $50,000 to get as much as someone making $150,000,'' Basnight said. ``The present plan doesn't do that.''
Basnight's idea got a chilly reception from Republicans who control the House. In approving a $237 million personal income tax cut this session, they boasted that it would give a break to every taxpayer in North Carolina.
``You don't punish anybody in the upper incomes,'' said Republican Rep. Gene Arnold of Rocky Mount, co-chairman of the House Finance Committee. ``They've worked hard. Why should they be punished?''
Speaker Harold Brubaker said that House Republicans started out with a goal similar to Basnight's plan, but ran into unexpected problems.
``I agree with the philosophy, but it makes the tax return so complicated you have to hire an accountant,'' Brubaker said.
In their pre-election contract with voters, House Republicans promised to deliver an income tax cut of at least $200 million for working families in North Carolina.
``We tried to make our bill as friendly to the working guy and working girl as possible,'' said House Majority Leader Leo Daughtry, a Republican from Smithfield.
Basnight argues that the tax-cut package he and Brubaker have already agreed to, will provide plenty of relief to the state's wealthier residents. That agreement calls for repeal of the $127 million intangibles tax, which primarily will benefit corporations and well-to-do stockholders, and a $237 million cut in personal income taxes.
Basnight points to an analysis by legislative fiscal staff that shows that the combined effect of the House income tax cut and repeal of the intangibles tax would give a $453 tax break to a married couple with no children and an income of $150,000. A married couple with no children an d an income of $50,000 would get only a $120 tax break.
Similar disparities, although not as severe, would occur for couples with children. ILLUSTRATION: Photo
Marc Basnight
Wants middle-income tax relief
by CNB