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As part of the generalized War on the Poor that they’ve been waging in recent weeks, state lawmakers have taken aim on the state Earned Income Tax Credit — an efficient program that provides workers earning low wages with a credit to offset their total state and local tax contributions.

Two new items documenting the folly of this action are worth a look this morning:

#1 is this op-ed in today’s edition of Raleigh’s News & Observer by Budget and Tax Center Director, Alexandra Sirota. As she notes:

“The EITC is an effective tool for keeping children and their families out of poverty, and it helps families keep working and on the path to the middle class.”

#2 is this new interactive infographic on the main Policy Watch site. It allows you to use your computer mouse to hover over any county in the state and get a glimpse of the credit’s impact.

Let’s hope state policymakers start paying attention to these compelling arguments.

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Be sure to check out the Fitzsimon File this morning, where Chris has some of the latest U.S. poverty numbers as well as data surrounding one of the country’s best anti-poverty tools — the Earned Income Tax Credit. Not surprisingly, given the tenor of the 2013 legislative session thus far, the state version of the credit is on the chopping block for conservatives running the General Assembly — i.e. the same folks who are already moving to repeal the estate tax (which only impacts a tiny fraction of the wealthiest estates in North Carolina).

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Today the Budget & Tax Center released a brief, “North Carolina’s Earned Income Tax Credit: A Support to Working Families with Widespread Benefits”, that presents county level data on the number of working families receiving the state Earned Income Tax Credit (EITC). Among the facts offered about the credit:

  • The state EITC provides workers earning low wages with a credit to offset their total state and local tax contributions. The state EITC was worth 5 percent of the federal EITC to a family claiming the credit in 2010.
  • Recently available data from the N.C. Department of Revenue show that more than 883,000 North Carolinians claimed the credit in 2010 and that they live in every county in the state.
  • National research on the EITC finds that the credit has reached nearly half of workers with children at some point and the majority received it for a short period of time.

Click here to read the brief and to see how the credit boosts the economies of each of the state’s 100 counties.

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by Rebecca Clendenin, Action for Children. 

Yesterday, monumental legislation was signed into being by Governor Mike Easley.  The final state budget included NC Kid's Care and a 3.5% refundable earned income tax credit (EITC), both of which will improve outcomes for children and families across our state.

NC Kids’ Care, which begins on July 1, 2008, will make available affordable health insurance coverage to 38,000 currently uninsured children in families between 200%-300% of the Federal Poverty Line ($42,000-$62,000 per year for a family of four).  Families would participate in the cost of care in the form of deductibles, co-payments and monthly premiums subsidized on a sliding scale based on income.  The NC legislature approved $368,000 to establish administration of the program in the first year, and has agreed to fully fund the Kids’ Care program at $7 million in subsequent years.  This expansion of health insurance means that thousands more children will become eligible for affordable health coverage.

Additionally, the NC General Assembly adopted a 3.5% NC refundable EITC.  The EITC will give a tax credit to more than 825,000 working North Carolinians at the time they file their state tax returns.

Action for Children hopes that this marks a first step in providing even more needed supports for our working families.

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Last week progressives in three states passed legislation that addresses living wages, state EITC and mental health parity.

We can do itMaryland approved the first-in-the-nation living wage bill. HB430, sponsored by Del. Herman Taylor, requires state contractors to pay employees a living wage. The bill creates a two-tier system: wages in urban areas will be at least $11.30 per hour; wages in rural areas will be at least $8.50 per hour. Maryland’s minimum wage is the same as North Carolina’s, $6.15 per hour.

New Mexico’s Governor Bill Richardson signed a bill creating a state Earned Income Tax Credit (EITC) worth 8% of the federal EITC. HB 436 introduced by Rep. Ben Lujan will help low-income working families in New Mexico.

Washington Governor Christine Gregoire signed a bill broadening the state’s mental health parity law. The bill, HB1460 sponsored by Rep. Shay Schual-Berke, will require health insurers to offer mental health coverage that is equitable to medical coverage to small businesses and individuals. A 2005 mental health parity law already covered employees of large companies.

News of these bills passed by other states leaves me wondering, if they can do it, why can’t North Carolina?

This session, legislators are considering HB51, which provides a 10% of the federal EITC, as well as a mental health parity bill (SB1434). These bills would go a long way to improving life for half a million North Carolina families who are struggling financially. Other states are proving that it is not too costly to provide living wages, Earned Income Tax Credits or mental health parity. We can do it too!