NC Budget and Tax Center

House Finance Committee tweaks House tax plan, raises budget hole to $864.4 million

Members of the House Finance Committee yesterday made the House tax plan even more expensive, as just noted by my colleague.

The committee removed the $25,000 cap on the amount taxpayers can deduct for charitable contributions, mortgage interest, and local property taxes. The tax plan still means significant tax cuts for the top 5 percent, and it would further slash investments in things that help our economy, like our neighborhood schools and world-class universities.

The committee changes would reduce revenues by $525 million per year, bringing the total cost of the House tax plan to $864.4 million per year once fully implemented.

No area of the state budget would be unharmed by the revised House Tax plan. After several years of budget cuts that have taken an enormous toll on the state’s investments in education, safety, and healthcare, North Carolina must start rebuilding the foundation of our state economy, but the House tax would do just the opposite.

To put the cost of the House’s tax plan in perspective, the cost of the House tax plan could pay for every single one of the following investments in children, families, and communities:

  • Give access to NC Pre-k for one year to 24,000 children, including the 12,000 currently on the waiting list
  • Provide child care subsidies for one year to the families of 20,000 kids, which is half of those currently on the wait list
  • Keep 13,900 teaching assistants in elementary classrooms over the next two years
  • Avoid increasing class sizes for K-12 classrooms for one year as proposed by the Senate budget
  • Avoid repealing the salary raise for teachers with master’s degrees as proposed by the Senate budget
  • Avoid the tuition increase for community colleges proposed by the Senate over the next two years
  • Pay for the Minority Male Mentoring Program—which aims to ensure at-risk students complete their program—at community colleges for one year
  • Fund for two years drug treatment courts, which help rehabilitate non-violent offenders so they can become productive members of society
  • Fund for one year the Housing Trust Fund, which helps ensure that working families are able to pay for housing expenses and still pay for basic necessities like child care and groceries
  • Avoid the $7 million cut rural economic development in the Senate budget
  • Continue public transportation grants at their current level for two years

North Carolina cannot afford tax breaks for profitable corporations and wealthy individuals—especially ones based on disproven economic theories—when the cost is teacher layoffs, ever-growing waiting lists for pre-kindergarten programs, and the dismantling of public policies that serve as a lifeline for vulnerable families. There are better options.

5 Comments

  1. Doug

    June 5, 2013 at 4:40 pm

    This definitely gets better every day. The fewer dollars confiscated from the people of NC the more economic activity we free up.

  2. Jack

    June 5, 2013 at 6:24 pm

    Confiscation of people’s money has already happened with what was called “the bail out” and “too big to fail” bull-sh*t. By the time the powers-that-be get through raising taxes via their method there will be damage beyond belief. It will take a little while before the damage can’t be hidden but in time it is going to be world where July 1 is an everyday reality.

  3. Doug

    June 5, 2013 at 9:48 pm

    Actually the “bail out” …at least of banks has made the Feds quite a bit of money. The banks that were forced to take the money “contributed” significant profits to the government. Heck, if you take out the government bailing themselves out of the Freddie/Fannie mess they themselves created via the community reinvestment act and such…you pretty much come up with a breakeven situation.

    Too big to fail…I agree with you there. If we had allowed the poorly run companies to fail we would have had a huge mess, but we would at least be on track now. It would have forced the hard choices onto the government to cut a lot of entitlements, thats for sure.

    Here is a link on the bailout just for you lazy people who can’t google.

    http://projects.propublica.org/bailout/list

  4. david esmay

    June 6, 2013 at 2:20 pm

    Once again our factually challenge conservatroll Dougie Boo Boo swings and misses. Freddie/Fannie mortgage loans out performed the toxic waste peddled by Wall St. and accounted for a small percentage, about 8-12% of sub-prime lending. Wall St. on the other hand is wholly responsible for the financial crisis. I suggest D-boo-boo read Michael Lewis’ The Big Short, it is an adult book with no pictures.

  5. Doug

    June 7, 2013 at 10:36 am

    dave,
    Actaully you are the factually challenged one. Fannie/Freddie took on a great deal of those loans, maybe you do not understand that they underwrite and purchase, then attempt to turn those loans into CMO’s, but it is a fact. Who do you think these banks were selling to? Banks don’t actually keep many of those loans where you have no money down, or whatever the terms may be on these various loans. When you see FNMA, FMLC etc on your mortgage backed CMO (not that I really expect you to know what that is)….of which there are billions and billions of dollars of them out there….that is what you are buying. True, there are some FHA and veteran loans, but those Freddie/Fannie loans are pervasive.

    Just because you are a low information person does not mean you have to come here to show us. Maybe you need to read up some yourself and not read the progressive view of economics, maybe get some experience before you open your fat mouth.