Failed Tax Amendment Shows Deep Political Divide

May 17, 2016

Credit Alan Cleaver / Flickr

Sometimes the most interesting part of the legislative process is watching an amendment fail. The debate, while collegial, shows the deep resentment some lawmakers have for those of the opposing political party. And just such a debate happened in Raleigh on Tuesday.

When Republican Representative Bill Brawley of Mecklenburg County called the House Finance Committee to order, he knew he was opening a passive aggressive can of worms. "We have just one bill, it’s very minor and of probably no controversy whatsoever."  The bill was the House’s proposed $22.2 billion state budget. And yes, he was kidding.

Now, the Finance Committee’s focus is largely tax policy. Deciding what tax increases or tax cuts go forward. And this year, the House’s plan does have a tax cut for individuals, introduced by Republican Susan Martin, "The first significant piece of legislation in here is the increase in the standard deduction for personal income tax by $2,000."

If you’re not well acquainted with the exciting world of tax linguistics, the standard deduction is the amount of personal income not taxed by the state. It’s also known as the zero tax bracket. But you can only claim it if you don’t itemize your tax returns. And Martin told the committee a lot of North Carolinians don’t. "Seventy percent of individuals who file income tax file with the standard deduction."

The house budget proposes increasing that deduction for a couple filing jointly by $500 a year, each year, over the next four years. It would grow to $17,500 by the year 2020. It’s estimated to cost the state $193 million when it takes full effect.

Republicans said the cut is worth it because it would help poor and middle class families. Democrats disagreed with that. And offered a plan of their own. Restoring North Carolina’s Earned Income Tax Credit, a tax cut on the wages of the poor and lower middle class. "Now you may think the only people who benefit from this is people who work at McDonnalds where it’s acknowledged it's not a living wage," Said Democrat Paul Luebke who introduced the amendment, "But the research also shows that beginning school teachers at $35,000 if they have a family, they are all among those who benefit from the Earned Income Tax Credit."

Which, Luebke pointed out, was killed by North Carolina’s Republican legislative majority. And he would pay for the plan by increasing the income tax rate on those making more than $1 million a year.

Bill Brawley knew how the majority Republican committee would view that plan. "You and I know this amendment is not going to pass." Still, lawmakers from both sides jumped up to take politely veiled political pot shots.

First came Republican Dan Lewis saying, "I appreciate once again the effort to demagogue and penalize those who are able to raise the level of income that they earn." Taxing millionaires – that’s just political talking points," he added. Especially during an election year. Brawley agreed. "I would submit this is not about getting the Earned Income Tax Credit, this is about keeping alive a campaign issue."

"This is not a political issue," countered Democrat Yvonne Lewis Holley, "this is an issue about need, and helping people."

Democrat Becky Carney from Mecklenburg tried to calm the legislative waters a bit. "We’re the finance committee, we’re supposed to debate the issues before us and not be judgmental."

But judgment was preordained, the amendment failed to pass but the process illustrated how quickly North Carolina’s politicians jump from collegiality to conflict.