NC Budget and Tax Center, Poverty and Policy Matters

Unless lawmakers reverse course, nearly one million North Carolina families will claim the state Earned Income Tax Credit (EITC) for the last time this tax season—one year after Gov. McCrory signed a bill ending the tax credit, according to a new report from the NC Budget and Tax Center.

In 2013, North Carolina lawmakers put an end to the state EITC, which helps low-wage workers keep more of their income so they can afford basic necessities, like child care, while pursuing deep tax cuts that primarily benefit wealthy individuals and profitable corporations. Combined with the income tax cuts that benefit the wealthy, the loss of the state EITC tilts the tax system even more out of balance. The state’s tax system already asked more from low- and middle-income families than it did from those earning the most, and this makes the disparity even worse. The resulting tax shift is neither true tax reform nor good for North Carolina’s economy. Read More

NC Budget and Tax Center

Yesterday, President Obama released his fiscal year 2015 budget proposal that includes several important improvements to the pro-work Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). When taken together, these improvements will reduce poverty among low-wage workers and their families, reduce income inequality, strengthen work incentives, and give a boost to North Carolina’s economy—all without adding a dime to the deficit.

Under the President’s proposal, approximately 381,000 low-wage workers without children in North Carolina would get a much-needed income boost. Currently, a childless adult working full time at the minimum wage pays significant federal income and payroll taxes, but receives an EITC of less than $30. In fact, childless workers are the sole group of workers that the federal tax system actually pushes below the poverty line, according to the Center on Budget and Policy Priorities.

Fortunately, the President’s proposal would reverse course and boost tax fairness by expanding the now-tiny EITC for childless workers, an idea that has growing support across the political spectrum. The proposal would also make workers between the ages of 21 and 25 eligible who are currently excluded from qualifying for the EITC. Read More

NC Budget and Tax Center, Poverty and Policy Matters

PlaceMattersBTC

 

 

 

 

This blog post is part of a series called Place Matters. The other posts can be accessed here and here

Imagine living in a community that includes the most undesirable and hazardous amenities a place has to offer such as a waste transfer station, a sewage treatment plant, and several landfills. Now, imagine being represented by county officials who decide to provide water and sewer services to an animal shelter but not to the residents—who happen to be more than three-quarters African American. And, these facilities primarily serve the majority-white residents in adjacent communities. Unfortunately, the residents of Royal Oak in Brunswick County don’t have to imagine this; they face this reality every day.

Majority-minority* and low-income Tar Heel communities face widespread environmental injustices—and environmental racism—that harm residents’ overall health and economic security. Such exclusion is exposed in a UNC Center for Civil Rights report, The State of Exclusion: An Empirical Analysis of the Legacy of Segregated Communities in North Carolina. Read More

NC Budget and Tax Center, Poverty and Policy Matters

Allan Freyer contributed to this blog post

The American Dream is continuing to slip out of reach for many North Carolinians. Far too often, working hard just isn’t enough to lift many of North Carolina’s low-income workers out of poverty, according to a new report from the NC Budget & Tax Center.

As we mark the 50th anniversary of the War on Poverty, the report finds that the persistence of economic hardship in North Carolina is largely due to a changing economy and the replacement of middle wage jobs in manufacturing with poverty wage jobs in the services sector. As a result, public investments in the safety net—such as food assistance and tax credits for working families—and economic development programs are often all that stand between low-wage workers and deep poverty. Far from failing, these are the programs that have lifted hundreds-of-thousands of Tarheel workers out of poverty while also helped those living just-above the poverty line too.

Specific findings include the following: Read More

NC Budget and Tax Center, Poverty and Policy Matters

In another sign of an economy that is failing to provide for working families, the share of female-headed working families considered low- income is increasing nationwide. There are now 4.1 million low-income families headed by working mothers in the United States, according to a new report by the Working Poor Families Project. The number of low-income working families that were headed by women jumped to 58 percent of the total in 2012, up from 54 percent in 2007. Figures are substantially higher for communities of color.

The low-income threshold for a family of three with two children was $36,966 (roughly twice the federal poverty line), according to the authors of the report.

The picture isn’t any rosier in North Carolina, which ranks 19th in the nation for the number of female-headed, low-income families. Of the 380,113 low-income working families in the state, 40 percent—or roughly 151,000—were headed by working mothers. Working hard simply isn’t enough for these families to make ends meet. Yet, we know that our economy grows best when the gains are broadly shared across the income distribution. Read More