THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, April 7, 1995 TAG: 9504070561
SECTION: LOCAL PAGE: B3 EDITION: NORTH CAROLINA
SOURCE: BY EMERY P. DALESIO, ASSOCIATED PRESS
DATELINE: RALEIGH LENGTH: Short : 49 lines
The Senate on Thursday passed an income tax cut proposed by Democratic leaders that gives relief to more than 90 percent of state taxpayers while holding back benefits from high-income families.
The bill passed by a vote of 43-1 gives some tax relief to about 92 percent of the estimated 3.9 million state residents who will file tax returns for 1995 next year.
``By doing that we have pushed more dollars of relief down to where we believe it is more needed,'' said Sen. John Kerr, D-Wayne.
The measure boosts the credit available for each dependent child to $60, 10 dollars more than a similar bill that passed the Republican-controlled House nearly two months ago. Like the House version, it increases the personal exemption from $2,000 to $2,250 this tax year and to $2,500 next year.
Senate tax writers paid for the bigger child credit by cutting off the estimated 235,000 taxpayers earning at least $100,000 a year.
Those earning more than $100,000 cannot claim either the child credit or higher exemptions. The benefit caps also apply to single people earning more than $60,000, married couples filing separately and earning more than $50,000, and heads of households earning more than $80,000.
Upper-income households will get their tax break from the expected repeal of the intangibles tax, a tax on investments such as stocks and bonds, Kerr and other Senate Democrats argued. The House has delayed repealing the intangibles tax until the Senate approves an income tax break.
``It is very important to remember that all legislation must be judged on its cumulative effect,'' Kerr said.
About 80 percent of the relief from the intangibles tax repeal will go to households that own $100,000 or more in assets subject to the tax, said Sen. Wib Gulley, D-Durham.
Senate Republicans tried to revert the tax cut back to the original House version.
The effort failed and members of both parties agreed that differences between House and Senate versions will be worked out in a select committee including members of both chambers. The bill will return for votes in both chambers after the differences are hashed out.
Only one senator, Republican Bob Shaw, voted against the bill. by CNB