Tax Justice Digest stories about North Carolina
Indeed, Meg Gray Wiehe of the North Carolina Budget and
Despite all this, however, some legislators in Michigan want to delay the introduction of that state's EITC. Last year, the state passed an EITC for the first time. Now, proponents of delaying the EITC argue that, given the state's current business and fiscal problems, the government simply can't afford the tax break. Of course, many of these senators are the same ones who have been advocating against any new business taxes in the state to replace revenue lost with the repeal of the Single Business Tax. It's true that the state is not in good fiscal condition, but during economic downturns anti-poverty measures become more important, not less. Michigan voters should urge their lawmakers to keep their promise to the working poor. For more information on state EITCs, try this helpful website. For more information on how EITCs work, read this ITEP policy brief.
NC Budget and Tax Center Report:
Strategies for Helping Low-Income Taxpayers - Comparing a No-Tax Floor to a State EITC
Governor Michael Easley’s recommended state budget set aside $63 million to reduce the income taxes paid by low-income taxpayers to be delivered through a “no-tax floor” plan. In fact, hundreds of thousands of the proposed 1.2 million taxpayers his plan claims to help already pay no income tax and would see no new benefit. In addition to not benefiting very low-income taxpayers, the governor’s “no-tax floor” also has numerous design flaws that make it inferior to a state EITC.
As the BTC has also documented, there's a better answer for policymakers who are truly concerned about not taxing low-income families further into poverty: a refundable state Earned Income Tax Credit. The goal of eliminating income taxes on poor families has gained heightened visibility in recent years, largely due to the Center on Budget and Policy Priorities' terrific annual report on this topic. Now, the BTC's work is prompting a healthy debate on how best to redress the inequities highlighted in the CBPP report.
In a welcome trend, lawmakers and advocates in Connecticut, New Jersey, North Carolina, Nebraska, New Mexico, Montana, Hawaii, Utah, Ohio, and Iowa are considering enacting Earned Income Tax Credits — or expanding existing EITCs. The federal EITC has been hailed by policymakers of all stripes as an especially effective tool for lifting working families out of poverty. At the state level, the EITC offers the additional benefit of helping to offset the regressive sales and property taxes that hit low-income families hardest. To find out more about whether EITC legislation is active in your state, check out the Hatcher Group's State EITC Online Resource Center.
Several states are debating ways to spend budget surpluses. Arkansas Governor Mike Huckabee has "tax reformation" plans which include putting more money in a rainy day fund and rebating money to taxpayers in the form of a tax credit. In response to the surplus in Idaho, legislators are debating ways to shift the tax burden from property taxes to regressive sales taxes. North Carolina legislators are taking notice of the financial hit that mental health services took during the previous recession and both houses have passed budgets that would provide more funds for these services. Of course, if any of these states had a Colorado-style TABOR policy there wouldn't even be a question about how to spend state surpluses because TABOR takes these important budget decisions out of the hands of elected officials.
