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The tax plan signed into law by Gov. McCrory earlier this year has been lauded by proponents as a major accomplishment during the 2013 legislative session. The tax plan, which cuts the state’s corporate and personal income tax rates, makes changes to the sales tax, and includes other tax law changes, reduces revenue for public schools and other public investments by more than $500 million over the next two years. By 2018, the tax plan reduces annual revenue by more than $650 million.

By chalking the tax plan up as a win for all North Carolinians, proponents fail to acknowledge the reality of fewer dollars for public investments and that the plan produces winners and losers. The tax plan does not represent a path toward shared prosperity for all North Carolinians, as BTC’s highlights in its analysis of the tax plan. Under the tax plan, taxpayers earning less than $84,000 a year, on average, will see their taxes increase and more than 65 percent of the net tax cut will flow to the top 1 percent of income earners in the state. 

Here are examples of taxpayers in North Carolina who are likely to see their total tax bill go up as a result of this plan. Read More

A majority of North Carolinians oppose tax cuts that put at risk the state’s investment in public education, a recent Public Policy Polling (PPP) survey shows. When presented with cutting funding for public schools in order to provide taxpayers a tax cut, 68% of North Carolinians oppose such a move.

The tax plan signed by Governor McCrory earlier this year reduced available revenue by $525 million over the next two years and revenue in future years is reduced even further. Benefits from tax cuts in the tax plan will largely flow to the wealthy and profitable corporations, which represent less than 10 percent of all businesses in North Carolina. Under the tax plan, the wealthiest taxpayers will see their taxes cut on average by more than $9,000, with top 1 percent of income earners getting 65 percent of the total net tax cut.

Opposition to cutting investments in public education to provide such tax cuts extends across ideology and political affiliation. Read More

Today is the 78th birthday for Social Security, the flagship safety net initiative for our nation’s seniors, surviving spouses and children, and disabled workers.  Since first created in 1935, Social Security has kept millions of working Americans out of poverty, allowing them to live with dignity in difficult times of old age or the loss of spouses and parents.

As a new report from the Alliance of Retired Americans makes clear, the benefits of Social Security for North Carolinians in particular are obvious. Perhaps most notably, Social Security provided benefits to 1.2 million of our state’s seniors in 2012, effectively keeping almost 500,000 of them out of poverty. Almost 1 million of these recipients were women.

As Congress debates the future of the federal budget, it remains vitally important that seniors, children, and those with disabilities be protected from unnecessary and damaging cuts to the benefits provided by Social Security. Instead, Social Security needs to be protected and strengthened for future generations, and the best way to accomplish that goal is take a balanced approach to the federal budget, one that increases new revenues by closing the tax loopholes and special giveaways that allow corporations to evade paying taxes. According to Citizens for Tax Justice, more than $1 trillion in new revenues can be raised by closing these loopholes.

So on Social Security’s birthday, it’s important to remember: rather than ask Seniors and our most vulnerable to bear the brunt of reducing the federal budget deficit, it makes far more sense to take a balanced approach that raises new revenues through the elimination of these corporate loopholes.

This upcoming weekend will mark the final sales tax holiday in North Carolina, one of the only good things to come out of the final tax plan recently signed into law by Governor McCrory.

Although policymakers have in the past said this policy is a way to address the fact that low- and middle-income families pay a higher percent of their income in taxes relative to higher-income families, it is inefficient and untargeted because everyone receives the tax break, not just those who deserve this tax relief.

There are other policies that would more effectively achieve this goal. The state Earned Income Tax Credit (EITC) is certainly a more efficient and effective way to reduce state and local sales taxes paid by middle- and low-income families. But the final tax plan eliminates the state EITC, which will hurt hard-working families across the state. Last year, nearly 907,000 low-wage North Carolina taxpayers in all 100 counties benefited from the tax credit. The EITC is widely recognized as one of the most effective ways to fight poverty, especially among children. This credit helps working families afford basic necessities and puts consumer dollars into local economies.

At the same time, the final tax plan gives huge tax cuts to the wealthy and profitable corporations. As a result, middle- and low-income families will, on average, see their tax load increase in the years ahead. So, instead of mourning the end of the sales tax holiday in North Carolina, we should urge policymakers to bring back the EITC to really address the fact that sales taxes hit low- and middle-income taxpayers hardest.

During yesterday’s tax reform debate on the House floor, we heard a lot about the need to cut personal income taxes so that small businesses can create jobs and the economy can grow.  This is a growing refrain among advocates for tax cuts for the wealthy, so common in fact, that policymakers made it once before—in 2011, when they passed an exemption of business pass through income, an exemption that they are now repealing (apparently the tax cut didn’t work).

As with many of the claims made during the debate about taxes this session, the idea that personal income tax cuts spur job creation is just not borne out by the facts.

Personal income tax cuts for the wealthiest taxpayers do not target actual small business job creators. Only 2.7 percent of personal income taxpayers are owners of small businesses that have employees, according to the U.S. Treasury Department. Moreover, profits from small businesses with paid employees account for less than 4 percent of the total income earned by households with incomes over $100,000 nationally.  There is no evidence that businesses owned by high income taxpayers have more employees than those owned by lower income taxpayers, and as a result, no reason to provide tax cuts that disproportionately benefit those with the highest incomes.  And for many small business owners of any income level, there is often limited interest in growing the size of their business—consider a family restaurant, for example—so again, cutting these business’s won’t lead to job creation.

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