Tuesday, March 03, 2015

Gas Tax Increase Bill Just Passed the NC House Finance Committee

The Committee considering S20 in the House would not record the ayes and nays this morning -- indicating that the Republicans did not want to be on the record on this vote. The voice vote was in the affirmative, according to the Chair of the committee, but people in the room said it sounded very close.

What's S20?

First, it's smoke and mirrors regarding the gas tax ... a small cut that will last a few months, followed by increases that will raise $1 billion in new taxes during the next few years. This has been dubbed a "Trojan Horse" bill.

But what else is in the bill?

Two really bad things ...

(1) A section in S20 would also eliminate the income tax deduction for tuition expenses, which amounts to a tax hike on college students.

(2) The worst provision by far: The bill would count underwater mortgages that are forgiven by lenders as taxable income. Homeowners who had their mortgages "written down" will never see a dime of that “income,” but lawmakers still want them to pay taxes on it.

This comes, naturally, out of overall fiscal mismanagement. Republicans in the General Assembly are now desperate for revenue, having given big tax breaks to the wealthiest citizens and corporations, so they are picking on groups they calculate won't or can't fight back ... college students (and their parents) and underwater mortgage-holders.

NOTE: Another really bad provision in S20, which would have meant the firing of some 500 DOT workers, got removed this morning in the House Finance Committee. But this bill is also headed to the Appropriations Committee in the House this afternoon and finally to the full House later this week, and whatever emerges will have to be reconciled with the Senate's much more savage version.

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