NC Budget and Tax Center, Uncategorized

Working Families Hit Again

Today on the House floor, legislators debated and passed HB 82 which will conform or decouple the state tax code from changes that have been made in the past year to the federal tax code.  A bill like this is passed every year because various aspects of the state tax code are linked to the federal one.

This year policymakers have made choices in this bill that will negatively impact low-income working families while the state’s wealthiest taxpayers receive a tax cut.  That’s right, working families will be hit again. Policymakers are reducing the Earned Income Tax Credit but choosing to conform with changes to the limits on the value of itemized deductions.  Nineteen percent of the state’s taxpayers earning less than $41,000 will see their taxes increase while the top three percent of taxpayers, those earning more than $235,000, will see a tax cut.

Itemized deductions are primarily claimed by well-off taxpayers because they provide a greater value than the standard deduction and that value increases the higher their income.  Under the fiscal cliff deal, the threshold at which crucial limits to itemized deductions was raised to $300,000. The result of the state conforming with this change is both a loss in state revenue and a shift in the tax load.  HB 82 reduces the state Earned Income Tax Credit to 4.5%, paying for the loss from conformity with the itemized deduction change.

For more on the bill, check out our Legislative Bulletin here.

 

 

One Comment


  1. love my state

    February 19, 2013 at 4:49 pm

    conforming on tax breaks for the wealthy but not on healthcare for the poor, talk about picking and choosing!

Check Also

House Finance Committee considering bill to amend state constitution tonight

UPDATE:  House Finance was cancelled last night.  Stay ...

Top Stories from NCPW

  • News
  • Commentary

When Gov. Roy Cooper signed the Strengthen Opioid Misuse Prevention or STOP Act into law last month, [...]

Support for needy districts and key positions within North Carolina’s top public school agency may b [...]

Wilmington is bustling this summer. Downtown, horse-drawn carriages take tourists along the riverfro [...]

For the first time in a long time, trial judges in North Carolina have independent research assistan [...]

It’s not an original thought to point out that the Trump Administration is a larger version of what [...]

Why this is not “business as usual” and should not be condoned Sometimes all one can do is stand and [...]

5.0---percentage of overall state spending in the 2017-2018 budget passed by the General Assembly as [...]

The post A legislative addiction appeared first on NC Policy Watch. [...]

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