Senate pitch is 'third way'

The Senate pitched a tax proposal this morning that represents the best chance yet for a budget deal.

Rep. Paul Luebke, a Durham Democrat, and key budget negotiator said the Senate proposal represents a compromise between the House and Senate priorities.

"I think we have the possibility right now to move on this third way," Luebke said after House Democrats broke up a caucus meeting about the plan.

Luebke and Sen. David Hoyle, a Gastonia Democrat, said the Senate pitch includes a higher sales tax, unspecified "sin" taxes and a surcharge on the income tax.

A continued sticking point is combined reporting, Luebke said. House Democrats want all national corporations to report all earnings in all states to make it tougher to dodge taxes. Senate Democrats want to continue to allow the state Department of Revenue to demand combined reporting in specific cases.

Hoyle said the Senate still believes in broadening the sales tax base by including more items and services, which would allow a lower rate for everyone.

"We've got to get out of here," Hoyle said. "We'll keep pushing that issue over the next six to eight months and present it at the short session."

Democrats are expected to return to caucus after an abbreviated floor session.

Correction: Post now includes updated list of taxes.