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Gas pumpThe Senate finalized its hurried approval of a new gas tax proposal today and as Budget and Tax Center analyst Tazra Mitchell explained yesterday, there are actually some things to like in it. Most notable among these is the bill’s recognition that tax rates will have to rise in the coming months and years to begin to meet the state’s infrastructure needs.

As today’s Fitzsimon File explains, however, the bill has some obvious and significant problems as well. First, is the wholly inadequate process whereby such a momentous and complicated proposal was rammed through with essentially no opportunity for public input. Second, is the silly camouflage that’s been added in the form of a temporary tax cut that will cost hundreds of Department of Transportation workers their jobs. And third is the inclusion of a totally unrelated proposal to tax people who lose their homes in foreclosure for some of the debt relief they receive (mind you, the people have still lost their homes). Great target for higher taxes there, senators!

Let’s hope the House addresses these flaws when the bill moves to the other side of the Legislative Building next week. Let’s also hope that the House considers one very obvious tool to address the inherently regressive nature of a rising gas tax: reinstating the state earned income tax credit (or EITC).

As Mitchell explained yesterday:

“Policymakers should reinstate a state EITC to offset the fact that the gas tax hits low- and middle-income taxpayers hardest. The state EITC was a key tool to ensuring that low-wage could keep more of what they earn and afford the costs of working, including gas and child care.  Reinstating a state EITC to ensure that the gas tax does not further increase the tax responsibility on working North Carolinians struggling to make ends meet is critical.”
Stay tuned.
Commentary

EITC_ncToday marks a little known “holiday”: Earned Income Tax Credit (EITC) Awareness Day. The IRS-led national event is intended – as the title implies – to spread awareness about this modest but vital tax credit and make sure that all qualified workers receive it. The day is as much about educating people as to what exactly the EITC is as it is about directing individuals to sites where they can get free tax help to claim the credit. For those that do, often for just two or three years, it can mean the difference between struggling for another year and getting back on your feet.

In North Carolina, however, the day isn’t so simple. In fact it’s hard to find cause for celebration in the only state in the country to have eliminated the credit.

There are plenty of individuals who are fully aware of what the EITC means for their own lives as well as those of their neighbors, despite its absence in the Tar Heel state. Last year, NC Justice Center staff spoke to individuals across the state that had been directly impacted by the credit and acutely felt the loss of the EITC.

They talked about how the EITC arrived at the perfect moment in their lives: when they gave birth to a child with medical needs and struggled to pay hospital bills; when they were stuck in a low-wage job that wouldn’t allow them to save enough to pay off their debts; or when they were hoping to finally become a homeowner after relying on family and friends for shelter. These were all working North Carolinians. Their stories were familiar and at times heartbreaking. Some are still struggling, and others saw their families lifted out of poverty thanks in part to the EITC. They are the individuals who once relied on the EITC and urge policymakers to reinstate the credit – not only for themselves, but so that other families can feel the benefits.

A few basic facts on the state EITC that bear repeating: Read More

Commentary
Eric Garner

Photo: www.commondreams.org

The issue of young men of color dying in police custody has been dominating the national news of late and rightfully so. Millions of Americans in many cities — mostly people of color — live in fear and/or distrust of the police in their communities and this is not a recipe for a healthy society. Concerted action — protests, demands, and action by community leaders and elected officials — are all necessary if we are are going to tackle this unacceptable situation.

Dana Millbank of the Washington Post was right recently when he wrote that President Obama would do well to seize the moment surrounding the outrage that’s occurred across the political spectrum in the Eric Garner case out of New York (tragically pictured above) in which a young man was killed by a police choke hold. As Millbank noted, the Garner tragedy offers some glimmers of hope in that the killing is actually drawing harsh assessments from white commentators on the right who rushed to the defense of the police officer in the Ferguson, Missouri case.

What to really DO about the situation, however, is less clear. Millbank says President Obama should  look at creating alternatives the grand juries for investigating police deaths. Others are pushing the idea of police body cameras. Those are both promising ideas as far as they go.

The real solution that no one really seems to want to talk about, however, is this: Read More

Commentary

TaxesCatherine Rampell of the Washington Post has an excellent essay in this morning’s edition of Raleigh’s News & Observer about how the American aversion to taxes has become an irrational and destructive affliction. Not only are we leaving core public structures and services chronically underfunded, we’re skewing our entire political system by turning our public servants into scavengers who must concoct ever-more-elaborate schemes to pay for the services we demand.

“Voters hate taxes and will punish any politician who threatens to raise them (or, in many cases, does not accede to cutting them). But schools, roads, police forces, garbage collection, firefighters, jails and pensions still cost money, even when you cut them back as much as voters will tolerate. So instead of raising taxes, state and municipal governments have resorted to nickel-and-diming constituents through other kinds of piecemeal, non-tax revenue raisers, an outcome that is less transparent, and likely to worsen the economy, inequality and social injustice.

Think of recent, infuriating stories on civil asset forfeiture, in which law enforcement seizes cash and other property from people who are never charged with crimes. Often the departments that do the seizing get to keep the proceeds, which leads to terrible incentives. Officers around the country now attend workshops that offer tips on the best goodies to nab (go for flat-screen TVs, not jewelry).

Forcing cops to remit forfeiture proceeds to the state or local treasury, rather than allowing an eat-what-you-kill policy, might discourage bad behavior to some degree. But at heart, the reason such actions are so commonplace is that government revenue has to come from somewhere, if it ain’t coming from taxes.”

As Rampell goes on to point out, this ridiculous state of affairs is transforming how we fund government from a broadly-shared, democratic enterprise  into a regressive, market-distorting mess. She might’ve also mentioned that it’s helping to transform how we think about government as well. Where once all citizens were stakeholders/owners, we’re now becoming cheapskate bargain hunters looking only to get the best deals for ourselves (e.g. private school vouchers).

Her solution: “It’s time to take off the fiscal blinkers and start rewarding politicians who have the courage to advocate raising revenues the old-fashioned way: through taxes.”

Amen to that.

Uncategorized

A new report from the experts at the N.C. Budget and Tax Center paints a sobering picture of what the new “recovered” North Carolina economy really means for average people:

“North Carolina’s recovery from the Great Recession has been marked by slow job growth and persistent challenges for working families to make ends meet. The minimal job growth has been concentrated in low-wage industries, a new report finds, which will only make North Carolina’s economic recovery that much more difficult. Read More