The Senate passed Senate Bill 622 Thursday, May 16, and Republicans project it will reduce individual and corporate taxes by $800 million over the next five years.
Sen. Paul Lowe, D-Forsyth, sided with Republicans in what was otherwise a 26-19 party line vote. A third and final vote is scheduled for Monday to send the bill to the House.
Republicans say the Tax Reduction Act of 2019 continues reforms that have reduced or eliminated personal income taxes for 99% of North Carolina taxpayers.
Democrats pushed back against the tax package on the Senate floor. They introduced an amendment reinstating the earned income tax credit, which refunds money to low- and moderate-income individuals even if they don’t owe any taxes. The amendment was removed from consideration.
In a joint news release S.B. 622 sponsors Jerry Tillman, R-Randolph; Ralph Hise, R-Mitchell; and Paul Newton, R-Cabarrus, took aim at Democrats.
“The Democrats have shown time and time again that they have absolutely no credibility whatsoever when it comes to the subject of taxes and budgeting, so their criticisms of the bill hold no water,” Hise said.
Democrats have said GOP tax reductions would lead to budget shortfalls. Instead there have been five straight years of revenue surplus, including an estimated $643 million this year.
“The last time they were in charge, their tax-and-spend playbook led our state into financial ruin and there is no doubt in my mind that given their druthers, they would lead us down that same failed path again,” Hise said.
The tax bill includes reductions in the franchise tax — a business tax — allows collection of more taxes from out-of-state businesses, and increases the amount of money that is exempt from personal income taxes.
Editor’s note: The headline was corrected after this story was initially published.