As the January 2013 expiration-date of the Bush tax cuts nears, policy makers in Washington are debating two different approaches that would provide dramatically divergent benefits for North Carolina’s middle and low-income residents, according to a newly released report from Citizens for Tax Justice (click on North Carolina to see the state-specific fact sheet). The first plan, proposed by President Obama, would cut taxes by $250 for North Carolina’s poorest 20% of residents and $930 for residents with incomes in the middle 20%. The second plan, on the other hand, is supported by Congressional Republicans, and provides the overwhelming amount of benefits to the wealthiest 1% of North Carolina’s residents, who would a receive an average tax cut of $48,540 next year. Under this plan, the poorest 20% would receive a tax cut of just $70 next year, and the middle 20% would receive just $850.
For more details on each plan, including specific tax changes and their impact on the Federal budget deficit, read the full report.