Tag: economy

Repealing Estate Tax Benefits Few, Harms Many

March 11, 2013 at 12:50 pmCategory:NC Budget and Tax Center

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Twenty-three. This is the number of tax filers that were subject to the estate tax in North Carolina for tax year 2012 according to data from the NC Department of Revenue. The small number of taxpayers paying estate taxes doesn’t support claims made by proponents of eliminating the estate tax. Members of the House Finance committee recently voted to repeal the estate tax, with proponents claiming that the estate tax punishes those who have accumulated great wealth across North Carolina.

The estate tax only applies to the wealthiest individuals in the state and changes made to the estate tax as a part of the fiscal cliff deal will likely result in even fewer estates in North Carolina paying the tax. For 2013, the estate tax is only levied on the portion of an estate’s value that exceeds $5.25 million. In 2012, the tax year for which data is available, the threshold was $5.12 million.

Repealing the estate tax does not address any of the issues with the state’s upside-down tax system while providing beneficiaries of multi-million dollar estates a tax break. Furthermore, repealing the tax will reduce the availability of dollars for investment in the foundation of economic opportunity.

States with Personal Income Taxes Still Outperforming States without Such a Tax

March 7, 2013 at 11:17 amCategory:NC Budget and Tax Center

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A 2013 report released by the Institute on Taxation and Economic Policy (ITEP) updates analysis showing that states that levy a personal income tax are experiencing conditions on par with, if not better than, states with no personal income tax. One of the central claims from proponents of cutting or repealing the state personal income tax is that states without a personal income tax outperform states with such a tax. The ITEP report highlights that this claim is not true.

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Top 5 pressure points in the state budget

March 1, 2013 at 11:16 amCategory:NC Budget and Tax Center

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North Carolina legislators are in the months-long process of developing the two-year state budget that covers July 1, 2013 through June 30, 2015. In light of the state’s murky economic outlook, it is important for legislators to consider the major drivers that will impact General Fund availability. There are many pressure points in the state but the biggest 5 include the following:

  1. Schoolchildren. As the single largest appropriations-supported category in the state budget, the needs of K-12 public schools are the most significant driver of the state budget. The K-12 budget has suffered through massive cuts over the last several years, and state investment in public education as a share of North Carolina’s economy is lower than before the Great Recession. This comes at a time of increasing demand: from school year 2008 to 2012, the student population grew by nearly 20,000, or 1.5 percent. The growing number of children enrolled in public schools only places additional budget pressure on an already stressed educational system. Read More…

Funding Cuts to Public Education Threaten State’s Leadership Position Among Southern States

February 27, 2013 at 3:25 pmCategory:Falling Behind in NC | NC Budget and Tax Center

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This week has been deemed Education Week by legislative leaders, who have invited superintendents, principals and teachers from across the state to Raleigh to discuss public education issues. As education leaders and teachers share their thoughts and concerns regarding public education, funding has been a key part of that conversation.

With consistent improvement in proficiency rates, National Assessment of Educational Progress (NAEP) scores, and graduation rates over the past 20 years, North Carolina has long been recognized for its commitment to public education – both K-12 education and higher education. However, significant cuts made to K-12 and higher education in recent years threaten to erode the leadership position the state has achieved among southern states. As lawmakers work to craft and approve a biennial budget for FY 2014-15, investment in public education will be a central part of the budget debate.

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Report highlights that taxes and spending are not out of line in North Carolina

February 25, 2013 at 1:42 pmCategory:NC Budget and Tax Center

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A report released by the Program Evaluation Division within the NC General Assembly highlights that North Carolina ranks in the middle of the pack, or better, among states for various taxes and spending metrics. For FY2009-10, metrics for which North Carolina ranked in the top half of states include:

  • Per capita state expenditures (12th lowest among states);
  • Per capita state and local taxes (17th lowest among states);
  • State and local taxes as a percentage of personal income (23rd lowest among states); and
  • Per capita state taxes (24th lowest among states).

These rankings disprove the claim that state spending and taxes in North Carolina are out of line. Our state ranks in the middle of the pack or on the lower end among states. Read More…