NC JUSTICE NEWS: Laffer Tax Plan + Expanding Medicaid in NC + Regions Bank Ends Payday Lending

January 23, 2013

CIVITAS/LAFFER TAX PLAN: Study places burden on middle-class, poor

North Carolina policymakers are embracing a new tax plan that would provide a significant windfall to the wealthiest 20 percent of state taxpayers, while requiring low- and middle-income households to pay more.

The Civitas Institute commissioned a study by a consulting firm chaired by Arthur Laffer, whose economic theories have been discredited by mainstream economists. This study addresses the false claim that taxes are the main barrier to job creation and economic growth, saying that tax cuts for businesses and high-income individuals will create hundreds of thousands of new jobs.

The underlying theory of the study, that income taxes are a barrier to economic growth, is simply wrong. Worse yet, the study's tax plan — which has been embraced by our state leaders — fails everyday North Carolinians in other crucial ways:

  • The plan fails to raise more revenue than the state currently does, meaning North Carolina would be unable to make adequate investments in education and transportation.
  • Under the new plan, the wealthiest 20 percent of taxpayers would receive a significant tax cut, paid for by shifting the tax load to 60 percent of the state’s taxpayers, primarily middle class and low-income households.
  • It would radically change the state’s tax system by eliminating the personal income, corporate income, and franchise tax, which represent a combined 65 percent of the state’s revenue and generate $12 billion in revenue for schools, roads, and other public priorities.

A sound tax system allows North Carolina to invest in schools, roads, public safety, and other public structures that build a foundation for economic growth, the report said. Yet the Civitas/Laffer plan does the opposite by benefiting high-income individuals and locking in a revenue level that fails to meet our needs now and in the future. North Carolina needs true tax reform that would help promote a brighter future for all North Carolinians.

EXPAND MEDICAID: Organizations ask McCrory to implement expansion

As North Carolina begins implementation of the Affordable Care Act, Governor McCrory and the North Carolina General Assembly will have to decide whether to expand health coverage to those of more meager means.

More than 70 organizations from across the state are calling on Gov. McCrory to implement the Medicaid Expansion for low-income individuals under the Affordable Care Act. In a letter to the governor, these organizations ask state leaders to consider a move that means new jobs for health professionals as well as new money, especially for rural hospitals that see so many uninsured patients.

Under the current NC Medicaid program, if a person between the ages of 18 and 64 does not have a serious disability or is not the parent of young children, they cannot qualify for Medicaid coverage, regardless of how poor they are. The ability of approximately 500,000 low-income citizens to get affordable health coverage — many of whom live in the poorest and most rural parts of our state — will hinge on state leaders’ decision to expand Medicaid.

With over $20 billion in new federal dollars coming into North Carolina as a result of a Medicaid expansion — and with the federal government picking up 100 percent of the cost of the expansion for the first three years and an average of 93 percent of the cost over the next decade — this is a great deal for North Carolina.

REGIONS BANK: Advocates succeed in ending harmful payday lending

Thanks to a campaign by consumer advocates and state leaders, Regions Bank has dropped its harmful payday lending program in North Carolina.

Payday loans have been illegal in North Carolina for more than a decade, but that hasn’t stopped all payday lending. For the past year, Regions Bank has used federal banking law to offer payday loans that are illegal for any other lender to make in our state. These loans carried, on average, an annual percentage rate (APR) of 365 percent.

Now, after significant pressure from the state Attorney General’s office and consumer advocates — including the Center for Responsible Lending (CRL) and the North Carolina Justice Center — Regions has quietly dropped its payday lending program for North Carolina customers.

Not only is the move the right thing to do, it should also go over well with North Carolinians. A poll conducted last September by Public Policy Polling on behalf of CRL found that 93 percent of respondents were less likely to use a bank that makes payday loans that violate North Carolina law. Removing the payday lending program is a victory for all North Carolina consumers, especially in the wake of the bad lending that led to the financial crisis. The last thing North Carolina needs is destructive loans that harm families that are already struggling.

SIGN THE PETITION: Stop Duke and Progress Energy from raising rates

Don't let Duke and Progress Energy's rate hikes harm those who are hurting financially and damage our struggling economy. They are asking for a profit level that is too high in the current economy.

Rate hikes would dramatically drive up electricity bills for seniors, families, schools, towns and small businesses. Increasing rates will cost jobs and challenge the ability of the poor and those on fixed incomes to have a decent quality of life and stable retirement.

Sign the petition here. There will also be multiple hearings on long-term Integrated Resource Plans (IRPs) and rate hikes around the state over the next few months. Click here for a complete schedule of events.

HKonJ SAVE THE DATE: Historic March on Jones Street - Feb. 9, 2013

Six years ago, the North Carolina NAACP began building a multi-racial, multi-issue alliance of progressive organizations in North Carolina to form the Historic Thousands on Jones Street People’s Assembly Coalition (HKonJ-PAC). The movement — made up of over 125 member organizations — will continue its anti-racist, anti-poverty and anti-war agenda with its annual march on February 9.

The 7th Annual HKonJ march will take place on Saturday, February 9, 2013. Armed with the historic shout “We the People Shall Not Be Moved: Forward Together Not One Step Back!”, HKonJ aims to unite individuals from all walks of life. Citizens will march in support of voting rights, equitable education, collective bargaining, affordable housing, health care, environmental justice, and the protection of the rights of immigrants.

Assembling will begin at 9:30 a.m. on Saturday morning at Shaw University on South Street in Raleigh. The march to the General Assembly will begin at 10:30. Visit the HKonJ website for more information and details on the HKonJ 14-point agenda.

DEFENDERS OF JUSTICE AWARDS: Make your nomination today

The Defenders of Justice (DOJ) Awards are given by the Justice Center to honor individuals or organizations that are making significant contributions in the following areas: Litigation; Research and Policy Development; Public Policy Advocacy and Grassroots Empowerment. Recipients will be honored at our annual event this spring, either in late April or early May.

Eligible nominees must be based in North Carolina. If you would like to nominate an individual or organization in one of the following categories, please complete this nomination form and return to Melissa Wiggins at melissa@ncjustice.org no later than January 31, 2013:

  • Litigation – Representing clients in high-impact cases that protect and expand the rights of low-income groups and individuals.
  • Policy Research and Advocacy - Conducting and disseminating research and development alternatives to existing policy.
  • Legislative Advocacy – Working with traditionally underrepresented populations to define and shape public policies.
  • Grassroots Empowerment - Developing programs designed to help community based organizations or individuals be leaders within their own communities. These organizations or individuals will have examples of programs that have been successful.

Stay tuned for more details on the Defenders of Justice Awards over the next few months.

 

Authors: 
Research & Publications: