This is from this morning’s Fayetteville Observer :
“The state’s fiscal year began last week, but it did so without benefit of a new budget. That’s on hold until the House and Senate can agree on much-needed changes in the tax code.
Unfortunately, the two legislative bodies are miles apart in their tax plans and appear determined to stay that way for a while. Until they settle on the way they’ll tax us, they can’t move forward on the way they’ll spend the money.
The Senate did blink last week. It passed a watered-down version of its tax plan Wednesday. But even that modified bill may be stronger medicine than many state interests want to take. It eliminates corporate income taxes over the next few years and cuts personal income taxes to a flat 5.75 percent.
Legislative analysts conclude that the measure will be most beneficial to the wealthy. Senate leaders say it will stimulate job growth. But while we all enjoy tax cuts, we see job creation more a creature of economic cycles and consistent, predictable regulation than a product of “trickle-down” programs.
Even Sen. Bob Rucho of Charlotte, architect of the original Senate tax reform plan, expressed disgust. “Cutting the corporate tax rate to zero is not the solution to our economic problems,” he said. “Real comprehensive tax reform requires everyone to pay their fair share toward the efficient operation of state government.”
One of the ways most tax-reform measures in Raleigh would hurt lower-earning taxpayers is the elimination of the Earned Interest Tax Credit, money that goes to the working poor. The measure began as part of the federal tax code, but there is a connected state version, as well.
If you think you know the definition of “working poor,” you may need to think again. Here in Fayetteville, it includes many of your neighbors – soldiers with families who are on the lower levels of the Army’s pay scale.
The N.C. Budget & Tax Center says the loss of the tax credit would hit about 64,000 military families and veterans in this state.
Now, the center is a left-leaning group, part of the activist North Carolina Justice Center. But numbers are numbers. If they’re right, lawmakers might want to consider the effect as they proclaim this the most military-friendly state in the country. Loss of the tax credit wouldn’t be very friendly to our military families.
The ball is in the House’s court this week. We hope it makes some progress toward common-sense tax reform. But not on the backs of our lowest wage earners or our soldiers.”