BEYOND THE NUMBERS
We’ve pointed out in recent several months North Carolina’s policymakers’ harmful tax and spending decisions. The combination of tax cuts that benefit the wealthy, cuts to programs that support the state’s working families, and reduced investments in education and other key services will keep North Carolina from competing in the future.
In an editorial today, the New York Times continues to call attention to North Carolina’s misguided path, calling it a “demolition derby” that is wrecking years of progress for the Tarheel State.
Here’s three areas of particular damage:
- Support for working families. North Carolina this spring eliminated its Earned Income Tax Credit (EITC), ending it for working families at the end of the year. It will be the first state to eliminate its EITC, a credit that about half of the states have created to help working families with incomes up to roughly $50,000 make ends meet. Some 900,000 North Carolinians will see their overall state and local taxes go up as a result.
- Jobless benefits. The state imposed obscene cuts to unemployment benefits July 1. In a state where jobs remain hard to come by, jobless workers can now receive only 19 weeks of benefits — less than half what any other state provides. Some 170,000 jobless workers have been or soon will be affected.
- State finances. Under the banner of tax reform, the state legislature continues to consider various tax cutting plans. While the details differ somewhat, all of these plans contain one key element — they drain the state of revenues that finance key services in order to give big tax breaks to the wealthy and profitable corporations. The plans under consideration also would expand the state sales tax, making the overall state tax bill fall more heavily on low- and middle-income households. The Senate passed the newest version of its tax plan last week; the House and Senate now must reconcile their two plans — but even a compromise plan will reduce funding for important investments over time and raise taxes for low- and middle-income North Carolinians while handing a hefty tax cut to the state’s most well-off.
As the Times points out, North Carolina’s K-12 and higher education systems historically have set the state apart. To set a course to a bright economic future, the state should be strengthening these investments. Instead, its policymakers have made deeply misguided decisions that will make broadly shared prosperity elusive.