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Proponents continue to make the claim that all North Carolinians will benefit from changes in the tax plan signed by Governor McCrory earlier this year. The reality is that the tax plan includes costly income tax rate cuts and the elimination of credits and deductions that will mean 35 percent of taxpayers will pay more in income taxes. When ALL tax changes – income AND sales tax changes – are taken into account middle and low income taxpayers with income below $84,000 (the bottom 80 percent of taxpayers) on average will see their total state and local taxes increase, making the tax code even more upside down.

One of the particularly common refrains is that families will be protected because the standard deduction is doubled. However, for many, the doubling of the standard deduction is not sufficient to make up for the loss of the personal exemption, the refundable state Earned Income Tax Credit and other deductions and credits. 

In fact, the first dollar of income is taxed sooner than under current tax law. Read More

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

Businesses in North Carolina have been instructed by the state Department of Revenue to have their employees complete a new NC-4 tax form and workers and employers may be unclear as to why this is required. The simple answer is that the tax plan signed into law by Gov. McCrory means taxpayers will be paying more or less in NC personal income taxes starting next year.

Employers in the state are required by law to withhold a portion of their employees’ wages, typically each pay period, for NC personal income taxes and the NC-4 form helps employers estimate the amount of taxes to withhold. The new NC-4 form attempts to ensure that no employee is stuck at the end of the year owing a lot in NC personal income taxes or is owed a large refund by the state as a result of employers continuing to withhold NC personal income taxes based on 2013 tax laws. Read More

Speaking of anniversaries, the fine advocacy group Action for Children North Carolina celebrated its 30th last week. Executive Director Deborah Bryan sent us the following essay in contemplation of the event.  

Supporting Our Children’s Past, Present and Future

Since 1983, North Carolinians have raised millions of children–and we have millions more to go. Each in a small but real way holds the state’s future in his or her hands. Action for Children North Carolina exists to give them every opportunity to succeed. The last 30 years points the way for the decades to come.

Action for Children’s network of support has ensured that the voices of our children are heard in local and state government, school districts and even our state’s juvenile and adult correctional facilities.

Our advocates have worked tirelessly to:

*expand Health Choice to cover more than 140,000 children;

*ensure the passage of critical child safety laws like the booster seat law and the child bicycle safety act;

*orchestrate the ban of corporal punishment in nearly all of North Carolina’s school districts; and

*help lift nearly 300,000 North Carolinians, half of whom were children, above the federal poverty line through passage of the Earned Income Tax Credit–all successes we achieved together.

Even with all of these accomplishments, our work is far from complete. Read More

Nearly half of likely North Carolina voters familiar with the tax cut package state lawmakers enacted this year oppose it, while only 42 percent support it. Don’t take our word for it. That’s what a poll by a prominent supporter of the package shows.

Of course, the group that commissioned the poll, Americans for Prosperity, chose to highlight other results that were more favorable to its position. But those results came only after the respondents were given one-sided information about the tax package, which slashed income taxes for profitable corporations and the wealthy.

Among those who had heard “a lot” or “some” information about the tax package even before the pollster called, 47% opposed it. Forty-two percent supported it and 11% weren’t sure. Read More