AP: Rucho resigns as NC Senate chairman on tax flap

Jun. 13, 2013 @ 05:01 PM

A chief architect of a North Carolina tax overhaul plan that's been rejected by other Senate Republicans and the governor said Thursday that he has resigned as co-chairman of the Senate Finance Committee.

Sen. Bob Rucho, R-Mecklenburg, wrote to Senate leader Phil Berger on Thursday to submit his resignation as chairman effective Tuesday afternoon, two hours before the tax-writing panel met to discuss an alternative tax overhaul plan presented by Berger.

"We both agree that real comprehensive tax reform is crucial to the economic future of North Carolina and its citizens, but we have a fundamental disagreement on the most effective model of tax reform and the management of that legislation," Rucho wrote in the letter dated Thursday.

Several weeks ago, Rucho and Berger rolled out to great fanfare a tax reform plan that would have expanded broadly the services subject to the sales tax while lowering income and corporate tax rates. But Gov. Pat McCrory said he preferred other plans — one by House Republicans — that took an incremental approach on lowering tax rates and allowing more services under the sales tax.

Rucho was absent from Tuesday's Finance Committee when Berger offered an alternative that would gradually eliminate corporate taxes without adding any new sales taxes to services. On Wednesday, Rucho said he would oppose the new plan and that true reform in a modern economy extends sales taxes to services.

The full Senate gave tentative approval to Berger's package Thursday, with Rucho one of two Republicans to vote against it. Rucho said in an interview later Thursday that the decision by McCrory and House Republicans to go another route forced Berger to offer a compromise and "basically gutted what comprehensive tax reform is."