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N.C. Senate Passes Tax Overhaul

Now the North Carolina House and Senate have passed their own plans to overhaul the state's tax system. The Senate gave final approval to its version Wednesday morning.

Republican leaders from the state House and Senate say their tax overhauls are all about jobs and the economy. They point out North Carolina has the highest income tax rates in the Southeast, and they argue that's keeping the state from attracting new businesses.

A big part of the Senate's solution is to cut individual income taxes and get rid of corporate income taxes over the next five years.

During the floor debate on the bill, Senate Democratic Leader Martin Nesbitt said those changes amount to tax cuts for the wealthy. 

"That's what it's about," Nesbitt said. "This isn't tax reform. It isn't economic development. It's giving tax cuts to the wealthy at the expense of the middle class."

The legislature's fiscal research division estimates some low-income families could see their taxes go up under the Senate plan. That's because it broadens the sales tax base and cuts some exemptions. But the researchers found most families would pay less in taxes, and wealthy families would see the biggest savings.

It's now up to the House to approve the Senate plan or set up a conference committee to work out the remaining differences.