Fitzsimon File

Limiting the income tax surcharge to higher income earners is an improvement, but still a far cry from the original House proposal that would have created two new tax brackets for the wealthy.

The new plan still ignores Senator Dan Clodfelter’s proposal to broaden the base of the sales and income taxes while lowering both rates, an important step toward the long-delayed reform of the state’s tax code.

Some Senators thought last week’s intervention by Perdue might allow them to try again to persuade the House to accept a version of Clodfelter’s base-broadening to both raise revenue and address some of the problems in the tax system.

The Senate brought in tax reform experts to testify at a finance committee meeting Tuesday, prompting some legislative observers to think that Senate leaders had decided to back away from the regressive deal struck last week.

That speculation ended Wednesday when negotiators reached a new deal while most of the state’s attention was on the appearance in Raleigh of President Barack Obama.

The new regressive plan is basically the old regressive plan, with the newly designed surcharge the only certain improvement.  There is still talk of setting up a study of tax reform as part of the final package.

Senate leaders reportedly want the legislation to direct the House and Senate Finance Committees to work jointly to come up with a reform plan to present next session.  House leaders apparently want to set up a more traditional tax reform study commission, though it’s not clear why its recommendations would have any more influence than ones already made by several high-powered panels.

Charging the joint finance committee to come up with a plan may guarantee more buy-in from key legislators, a vital part of passing meaningful tax reform, especially when the battalion of corporate lobbyists descends on the legislative building.

The corporate interests got their way again this year, keeping their tax breaks while quietly encouraging lawmakers to raise most of the new revenue with the regressive sales tax.

It is important to remember that House and Senate leaders did find the political courage to raise revenue in the face of a torrent of misleading rhetoric from the folks against everything who’d rather slash funding for public schools and vital human services than raise a penny in new revenue.

It’s too bad that the final tax package will raise the money in a way that makes the currently unfair system even worse. But let’s hope one legacy of this session is that it marked a turning point in the call for reform and finally set up a mechanism to make it happen.