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Last week, the Senate approved a tax plan that would drastically reduce needed revenues and shift the tax responsibility downward, away from the wealthiest tax payers.

This tax plan would also reinstate the cap on the state’s gas tax, which is a revenue source that accounts for more than half of state revenues dedicated for transportation projects. If the plan passes, the cap would be in place for the current 2013-14 fiscal year that began last week, resulting in a $5 million loss to the transportation budget that supports road construction, road maintenance, and public transportation.

Five million dollars is a very small share (.2 percent) of the $2.8 billion transportation budget. The larger cause for concern is that budget writers are following the imprudent precedent set by lawmakers from both sides of the aisle who keep enacting short-sighted, quick fixes to the gas tax—rather than reforming the structure of the tax to smooth its volatility. Read More

Thanks in large part to the rebound in the personal income tax, North Carolina is finally experiencing a slight uptick in revenues as the tepid economy slowly improves. Yet, at the first sign of revenues recovering, state lawmakers are pursuing tax policies that will pull back investments prematurely. North Carolina is already in a hole, and the tax plans being debated would make it very difficult for the state to dig itself out, make progress on unmet needs, and move forward.

These tax plans cut taxes for the wealthy and profitable businesses at the expense of everyone else. Proponents claim that these deep and lopsided cuts will create jobs and benefit everyone, but research simply does not support this conclusion. Read More

If the Senate tax plan moves forward, it is very likely that many low- and middle-income taxpayers will see their tax loads increase .

The Senate plan, in addition to the House Plan, do not include the Earned Income Tax Credit, the best tool for ensuring that working low- and middle-income taxpayers are not carrying a heavier tax load than their wealthy neighbors. This decision by Senate and House leadership to end the Earned Income Tax Credit will impact more than 907,000 North Carolinians.

When you look at the Senate plan combined with the end of the state Earned Income Tax Credit and keep in place the local tax on groceries, it’s clear that low-income working families would pay more, while the rich pay less.BTC_Tax Shift Continues_Senate Tax Plan Read More

It looks like Governor McCrory’s role in the big tax cut debate between House and Senate leaders might be merely to market what the legislative leaders come up with.

Here’s what House Speaker Thom Tillis told the News & Observer about McCrory’s role in the discussion about a tax deal.

We need the governor fully on board so he can communicate it and get people to understand it.

That’s a bit of an odd take from Tillis. He didn’t say they need to work with the governor because he is running the state or because he is the top elected official of their own political party or heaven forbid, because he might have some policy ideas and strongly held views of his own about taxes.

No, they need the governor on board only to sell the package that Berger and Tillis decide on. It is pretty clear legislative leaders believe they are in charge in Raleigh these days. McCrory? He is their PR guy.

In any public policy debate, fact-based analysis is critical. As North Carolina continues to discuss a major overhaul to the state’s tax code, there are numerous analyses that allow lawmakers and the public to see how the Senate tax plan will impact taxpayers and the state.

Here are a few of the best resources and analysis:

In the face of such evidence, lawmakers should scrap the current tax plans and instead look for a way to reform the tax code without hurting middle-class and low-income families and local communities.