Senate and House Tax plans fail to support low-wage working North Carolina families by letting the state Earned Income Tax Credit expire
By Cedric D. Johnson
Policy Analyst, Budget & Tax Center
Both the Senate and House tax plans would give huge tax cuts to the wealthy and profitable businesses while failing to address the state’s flawed tax system, which requires low- and moderate-income taxpayers to pay a larger share of their income in state and local taxes than wealthy taxpayers. The current tax system’s Earned Income Tax Credit (EITC) is a modest but vital support that helps over 900,000 workers earning low wages keep more of what they earn.
Unfortunately, at the beginning of the legislative session, policymakers chose to reduce this highly targeted and cost effective state tax credit for 2013 and let it expire at the end of the year. The elimination of the state EITC means low-income workers will pay higher taxes next year, making it even harder for them to afford basic necessities that are essential to their ability to keep working, like transportation and child care.