New from the numbers wonks at the Budget and Tax Center:

Allowing the state Earned Income Tax Credit to expire would harm veterans, active-duty military, a new analysis finds

RALEIGH (July 2, 2013) – About 64,000 veteran and active-duty military families in North Carolina would be impacted by current tax plans, all of which allow the state’s Earned Income Tax Credit to expire. New analysis by the Washington, D.C.-based Center on Budget and Policy Priorities and state-level analysis by the Budget & Tax Center found that tens of thousands of military families in North Carolina would be affected.

The Senate tax plan (HB 998, Fifth edition) being debated later today allows the state Earned Income Tax Credit (EITC) to expire, increasing the tax load on tens of thousands of low-income soldiers, veterans, and their families while the wealthiest taxpayers and profitable corporations get a tax break. Read More

NC Budget and Tax Center

There are reports that the state Senate and House leadership is working on a compromise tax plan—with the catch, of course, being that many North Carolinians will likely not view the final tax plan as much of compromise, especially in light of how it will probably treat low- and moderate-income taxpayers.

In order to truly be fair to low- and moderate-income taxpayers, the upside-down nature of the state’s tax code must be addressed. But, as our analysis shows, leadership is pursuing tax plans that ignore this principle of equity. They’re also ignoring the important role that the Earned Income Tax Credit (EITC) plays and confusing how the EITC matches up against the standard deduction and a zero tax bracket.

You may recall that at the beginning of session, legislators chose to reduce the state’s EITC—which is a modest but vital support for nearly 907,000 workers earning low wages—and to axe the credit at the end of the 2013 tax year. Read More


Alexandra Sirota, Director of the North Carolina Budget and Tax Center and the state’s leading independent tax policy expert issued the following brief statement this morning after the House Finance Committee debated and approved legislation to overhaul North Carolina’s tax code:

“This tax plan will provide the wealthiest North Carolinians a tax cut while middle-class and low-income taxpayers pay more.

The only amendment accepted makes things worse — adding $525 million to the price tag and bringing the revenue loss each year to nearly a $1 billion.  Without this vital revenue, North Carolina can’t  make needed investments in our economy, our children’s education, the health of our seniors and the safety of our communities.”  

Click here for a fact sheet with more information on the legislation (HB 998).


Just in from the good people at LWV-NC:

League Opposes Tax Plans

The League of Women Voters of North Carolina, meeting in Charlotte for its 34th biennial convention, announced its opposition to tax plans now being considered in the General Assembly which promote unfair and regressive tax policies, including House Bill 998.  This opposition is in line with long-standing positions of the non-partisan organization.

The League, which led the successful state-wide campaign to repeal the tax on food in the 1990’s, expressed concern that the tax plans being considered in the General Assembly will actually impede, rather than deliver, economic growth, job creation and the quality of life for NC citizens. Read More

NC Budget and Tax Center

Research has long shown that the Earned Income Tax Credit (EITC) for working families significantly encourages work—especially among single mothers—and reduces child poverty more than any other existing policy tool. Although the EITC is largely a temporary support, new research by the Center on Budget and Policy Priorities indicates that this tax credit generates broader benefits that extend well into adulthood for the recipients’ young children. These children perform better in school, are more likely to go to college, and earn more when they reach adulthood.

For instance, a $3,000 boost in income from the EITC during a child’s early years is associated with a boost in educational achievement that is equivalent to an extra two months of schooling. And as illustrated in the infographic below, a boost in income from the EITC during a child’s early years can contribute to a significant increase in earnings in adulthood as well as increased work activity for individuals between the ages of 25 and 37. Read More