Tag: budget

Public Statement before the House Finance Committee, Effort to Repeal Estate Tax

February 20, 2013 at 10:24 amCategory:NC Budget and Tax Center

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Public Statement before the House Finance Committee

House Bill 101 – Repeal of Estate Tax

February 20, 2013

Thank you Mr. Chairman and members of the House Finance Committee

My name is Cedric Johnson and I serve as a public policy analyst with the NC Budget and Tax Center. Since its founding, the Budget and Tax Center has advocated for a state tax system that meets the principles of adequacy, equity and stability, and that allows the state to make adequate investments in public structures that provide the foundation for economic growth.

I stand before the committee today in opposition to House Bill 101. Repealing the estate tax will not address the problems with our tax system: that it is upside-down and inadequate to support the foundation of economic growth.  And repealing the estate tax will not improve economic outcomes.

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Finance Committee Increases Tax Load for Working Families, Cuts EITC

February 13, 2013 at 4:06 pmCategory:NC Budget and Tax Center

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This morning, the House Finance Committee voted to reduce the state Earned Income Tax Credit (EITC) provided to low-income working families across the state. More than 883,000 North Carolinians claimed the credit in 2010, which provides working families with dollars to spend in their local communities. Each year the state updates its tax code to address changes made to the federal tax code during the previous year, as North Carolina’s tax code is linked to the federal tax code.

Improvements to the federal EITC were extended as part of the fiscal cliff deal, including eliminating the marriage penalty and extending the credit to larger family sizes. In decoupling the state credit from the federal credit, the Finance Committee voted to reduce the state EITC from 5% to 4.5% of the federal credit for tax year 2013. The result is a cut of $11 million to the state credit.

The EITC helps boost the wages of low-income families and helps them pay for basic necessities. Cutting the tax credit will further challenge the ability of these families to make ends meet and minimize its ability to address the upside down nature of our state and local tax system. The House finance committee also voted to cut the Work Opportunity tax credit. However, the committee did vote to increase the amount of itemized deductions that individuals can claim, which would largely benefit high-income individuals.

Problems identified by Medicaid audit largely result of NC Republican’s own budget

February 1, 2013 at 10:14 amCategory:Uncategorized

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Today’s headlines highlight a audit of the state Medicaid program that shows an over $1 billion shortfall.  ”Shocked, shocked, I tell you!” are Republican Governor Pat McCrory and DHHS Secretary Aldona Wos that the Medicaid agency did not meet its budget:

Dr. Aldona Wos, secretary of the state Department of Health and Human Services, said at the news conference that the agency will change the way it operates. “Cost overruns will not be tolerated and will not be acceptable,” she said. “There’s a budget for a reason.”

But the major finding in the audit, the one that has gotten all the headlines, that NC’s Medicaid program wasn’t able to meet the budget set for it by the Republican majority in the General Assembly (and passed over former Democratic Governor Perdue’s veto) shouldn’t be a surprise to anyone.  As former DHHS Secretary Lanier Cansler said on August 4, 2011:

“It’s just really going to be next to impossible to achieve this budget, and I’m not sure where the legislature will go with that,” Cansler said. “The fact that this budget plays into next year (means next year) is going to be a difficult budget year as well.”

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Who Pays Taxes in North Carolina

January 30, 2013 at 9:44 amCategory:NC Budget and Tax Center

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Who Pays Taxes in North Carolina

Today the Institute on Taxation and Economic Policy (ITEP) released its 2013 Who Pays? report, which provides a state-level analysis of how much state and local taxes are paid as a share of income by income groups. For North Carolina, ITEP’s analysis highlights the state’s upside-down tax system, in which middle- and low-income families pay more in taxes as a share of their income than wealthy families.

 Who Pays NC Chart 2013

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Tax Reform, all that glitters is not gold

January 29, 2013 at 9:36 amCategory:NC Budget and Tax Center

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The 2013 debate around tax reform started in earnest last week.  After the Senate leadership recently announced its support for eliminating personal and corporate income taxes and relying on the sales tax to raise most of the more than $12 billion in lost revenue, various folks have been weighing.

We put out an analysis last week on the impact of this plan as outlined by the Civitas Institute and Arthur Laffer’s consulting firm. These changes would mean a huge shift in the tax load to poor and middle-income North Carolina taxpayers and generous benefits to the wealthiest individuals.  And the plan doesn’t generate the economic returns that are so often promised with such proposals. Read More…