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NC Budget and Tax Center

This is the first of a six-part blog series.

What would the House tax plan mean for North Carolina taxpayers? In a series of blog posts, we aim to highlight the experience of sample taxpayers under the House tax plan. In conjunction with a distributional analysis of the tax plan which gives a better picture of the full impact, these fictional but true to life profiles will demonstrate that middle-, fixed- and low-income taxpayers would lose under this plan while the wealthiest will gain.

House tax plan does not bode well for the Hurt family

Dan and Alice Hurt are both proud natives of the Tar Heel state. The married couple has two young kids, ages 3 and 5, and have lived in Western North Carolina their entire lives. Dan works full-time as an hourly-wage employee for a large retailer and Alice works part-time as a server at a cafe in their local town. Together the couple earns around $20,000 in income and depends on every available dollar to help meet household needs and the demands of two growing children.

Under the House tax plan the Hurt household would see the amount of state and local taxes it pays increase compared to what the family would pay under North Carolina’s current tax laws. This increase in the family’s tax load is largely due to expanding the sales tax base to include more goods and services. While the tax rate cuts in the House tax plan appear appealing to the eye, the Hurt family would see its tax load increase not decrease. Consequently, meeting household needs and the demands of two kids would likely become more challenging for the Hurt family.

Uncategorized

Last night, the DREAMers did it again. They took a hopeful message and their own personal stories to a new audience, asking members of the Winston-Salem City Council to support a resolution on in-state tuition for North Carolina high school graduates, regardless of immigration status. The DREAMers keep insisting that our public policies must reflect our deepest values of fairness and equal opportunity, showing that the power of people is stronger than inhumane laws and a broken immigration system. Read More

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Jordan lakeIt’s gotten to the point where scarcely a day goes by at the North Carolina General Assembly in which the honorables don’t work to repeal some basic environmental protection law or rule. Yesterday the good people at the Sierra Club were forced to issue two statements decrying actions by lawmakers to reverse modest, common sense rules to help protect our air and water:

#1 – NC Sierra Club Statement on House Passage of H 201, Building Code Rollbacks Read More

NC Budget and Tax Center, Uncategorized

This is the first of a four-part blog series presenting voices from other states that have unsuccessfully pursued versions of comprehensive tax “reform.”

gbpi

Commentary provided by Alan Essig, Executive Director of the Georgia Budget and Policy Institute in Atlanta, GA.

As North Carolina considers major tax reform, it’s useful to take a look at a similar effort in Georgia a few years ago, because what started out as a plan to overhaul the state’s tax system in a responsible way that preserved important state investments quickly devolved into a proposal that put ideology and politics above the welfare of Georgians.

The core of Georgia’s problem was similar to what you are now seeing in North Carolina: the pursuit of drastic income tax cuts paired with a failure to replace this with another revenue source makes it impossible for a state to provide the services that people and businesses depend on every day, like roads, schools, and safe communities. Georgia wisely chose to reject such a proposal in 2011, just as North Carolina should this year. Read More

NC Budget and Tax Center

Comprehensive tax reform remains vague and “short on details” as the 2013 legislative session is beyond its halfway point. Nevertheless, stand-alone bills continue to make their way through the legislative process that would provide tax cuts to the state’s wealthiest individuals. Policymakers have just voted in the House to eliminate the estate tax and both the Senate leadership and the Governor have stated their commitment to do the same.

Proponents of eliminating the estate tax argue that the tax punishes small businesses and small farms in North Carolina. Evidence shows this claim to be false. The estate tax applies to a small number of taxpayers in North Carolina – less than one percent. For tax year 2011, only 23 North Carolina tax filers were subject to the estate tax, according to the North Carolina Department of Revenue. The reality is that the overwhelming majority of small businesses and small farms will not a pay an estate tax while heirs of the wealthiest estates in the state will. Read More