Nothing Inevitable about Choices in Unemployment Insurance Overhaul Bill

February 1, 2013 at 7:55 pmCategory:NC Budget and Tax Center | Uncategorized

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Policymakers have seemed to suggest that they had no choice but to overhaul the state unemployment insurance system in the way that they have proposed.  It is a bitter poison that we all must drink to get the economy going again is their claim.  This is simply not the case.

There was nothing inevitable about the choices that were made in this bill.

In fact, a tomb of options was laid out last Spring by the Upjohn Institute that would address the debt in the same timeframe and prevent the FUTA credit reduction to reaching what proponents of House Bill 4 assure us are unsafe levels. Read More…

Unemployment Insurance Taxes and Job Creation

February 1, 2013 at 11:23 amCategory:Uncategorized

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One of the major claims made yesterday in the House Finance committee was that the bill to overhaul the state unemployment insurance system was necessary to help businesses create jobs.  Job creation is certainly important right now as the lack of jobs is what is driving high, long-term unemployment.  Unfortunately, cutting unemployment insurance taxes is not an effective way to create the jobs North Carolina needs. Read More…

Parade of Horribles: Sliding Scale Scheme for Unemployment Insurance Duration

January 30, 2013 at 11:08 amCategory:NC Budget and Tax Center

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Today, county level unemployment rate data was released and tomorrow, policymakers plan to consider the bill to overhaul our state’s unemployment insurance system in a House committee.  In December 2012, we now know that unemployment rates by counties ranged from a high of 16.6 percent in Scotland County to 5.9 percent in Orange County. The state average was 9.5 percent for that month. In light of one aspect of the unemployment insurance bill that kind of variation suggests that unemployed workers will be treated differently by the system based on where they live.

That’s because the bill under consideration includes a provision that establishes a sliding scale for the minimum and maximum duration of weeks that an unemployed worker can receive unemployment insurance benefits based on the state unemployment rate. (We should note that no other state has a sliding scale for the minimum number of weeks while only two states (Florida and Georgia) have a sliding scale for the maximum number of weeks.) Read More…

NC EITC needed now more than ever

January 25, 2013 at 3:26 pmCategory:NC Budget and Tax Center | Uncategorized

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Today is EITC Awareness Day. It’s a timely occasion for North Carolina, as the debate over tax reform launched with a proposal to eliminate the personal income tax and, in turn, this important tax credit for working families.  Of course, the elimination of the state’s EITC, which has been widely recognized to be an important tool in addressing upside down tax systems, would also come when it is most needed.

The Budget & Tax Center released analysis this week that shows the replacement of lost revenue through the sales tax would shift the tax load even further onto middle- and low-income taxpayers in North Carolina. Read More…

Budget and Tax Center Statement on the Senate’s Tax Agenda for 2013

January 17, 2013 at 9:30 amCategory:Uncategorized

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Yesterday, Senator Berger confirmed speculation and shared more details about the Senate  plan to overhaul the state’s tax code as well as his vision for establishing North Carolina’s reputation as a leader among states.  The two cannot be reconciled.

In proposing to pursue elimination or significant cuts to personal and corporate income taxes, the Senate leadership is adopting the worst and most extreme policy options other states have to offer. This proposal will also compromise North Carolina’s ability to build a foundation for economic growth.  Without more than half of the state’s overall revenue that these taxes provide, North Carolina will not be able to invest in educating our workforce, supporting infrastructure critical to thriving businesses, or protecting the safety and well-being of communities.  And if his tax proposal were to include a shift to rely on the sales tax, as has been suggested in the Civitas/ Laffer study that serves as their template, the middle class would bear a heavy load for the investments that we all enjoy while the wealthy receive a tax break. Read More…