As was noted in this morning’s radio commentary, North Carolina lawmakers need to act to prevent an absurd outcome for thousands of state residents who will benefit from President Biden’s student loan debt relief initiative.
It turns out that while the federal government and almost all other states will not consider this debt relief as income for tax purposes, North Carolina will offer no such break. Instead, recipients will have to pay North Carolina income taxes on the debt relief they receive.
And, of course, this makes no sense.
As the lead Capitol Broadcasting Company editorial on WRAL.com put it this morning:
The North Carolina legislature is one “that’s never seen a corporate tax cut it didn’t embrace. It wasted little time to link to federal tax codes to exempt those businesses from state taxes on millions they got in federal Paycheck Protection Program (PPP) dollars.”
That’s why, the editorial notes, “It should act with the same dispatch to extend the same break to those with student loans.”
The editorial also echoes some of the main points conveyed in this morning’s Weekly Briefing — most notably that conservative critics like Sen. Thom Tillis should: a) can their hypocritical attacks on the relief program, and b) get serious about taking on the root cause of the debt crisis: inadequate investments in higher education.
As the editorial notes in conclusion:
Education, as the state’s founders clearly saw when they wrote the Constitution, was critical to the state’s civic and economic well-being. They saw it as a responsibility – and obligation – to provide as broadly as possible both access to a quality basic education as well as the additional benefits of higher education.
The General Assembly must act, immediately, to extend the personal tax exemption to those who will benefit from the federal cut in student loan debt.
Even more significantly, it should embark on an effort that fulfills the state Constitution’s promise of a higher education that is “free of expense” on all campuses – not just a select five.