Uncategorized

Once again shortsighted tax breaks have come back to bite us

A new report “Buddy Can You Spare a Dime” produced by the NC Budget & Tax Center demonstrates, biteyet again, how shortsighted tax breaks hurt us in the long run. This time the damage is to our unemployment insurance (UI) system.

Unemployment benefits are paid from a trust fund, which is financed by employer payroll taxes. The idea is that during good economic times the trust fund balance grows so that there are adequate funds available to pay benefits during economic downturns. In the early 1990’s the trust fund balance seemed large, so state leaders revised the policies and reduced the taxes that employers were required to pay. According to the report, “the General Assembly enacted a series of 13 payroll tax changes between 1992 and 2000.” Some companies saw their payroll taxes reduced to zero. These actions coupled with a decrease in federal funding have undermined the solvency of the UI trust fund.

The unemployment insurance system is an important safety net for individuals and an economic stimulus for the state’s economy. It is important that the General Assembly acts now so the solvency problems can be fixed.

Check Also

Trump and North Carolina

No related posts.

Top Stories from NCPW

  • News
  • Commentary

A court really shouldn’t shirk away from making a finding about a constitutional violation just beca [...]

Jim Womack has a reputation in North Carolina for being many things, but a conservationist isn’t one [...]

Just days after a North Carolina official tapped a Robeson County elementary for a controversial cha [...]

Two groups seeking state contracts to run struggling North Carolina schools have professional ties t [...]

20---amount in dollars of the average federal tax cuts in 2027 for households with children earning [...]

The folks running the General Assembly reached a new low this week in their efforts to dismantle our [...]

National civil rights leaders call for the rejection of North Carolina’s Thomas Farr [Editor’s note: [...]

Budgets matter, both within government and inside each household across America, because they demons [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more


NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more