Surprise, Surprise.?North Carolinians have voted themselves into a tax hike. North Carolina just gave millionaires a tax cut while some 900,000 working families and four out of ?five tax payers got a tax raise. From?billmoyers.com:
Along with the disappearance of the EITC, low-income North Carolinian’s will be paying higher taxes in order to pay for a tax cut for the richest people in the state. Republicans moved from a two-tiered, progressive income tax system to a flat tax rate of 5.8 percent. A person who earns a million dollars per year will get a roughly $10,000 tax cut thanks to that move, but the bottom 80 percent of the income distribution will see their taxes rise. That means that four out of five taxpayers in the state were going to pay more this year even before the EITC repeal.
What’s sad is that many of these same working poor families voted for the radical North Carolina politicians who force fed this legislation through the state legislature last year. This was done with very little fan fare and with the Republicans sweeping that state’s legislature in 2010 very little floor debate.?North Carolina voters have enabled a state GOP that have implemented the most draconian regressive measures that do nothing but force poor people into more poverty and less safety net options to help one from the condition. The state has already wiped out jobless benefits, passed the most controversial voter ID laws in the country and now as of the first of this year have?officially eliminated its earned income tax credit (EITC), giving North Carolina the dubious distinction of being the only state ever to do so.
These changes took effect at the beginning of 2014. This Spring will be the last time North Carolina poorest citizens will be able to take advantage of this tax break. Adding insult to injury, this last years benefit will be 10% less than previous years. This decision by the extreme North Carolina GOP will represent a tax hike for some estimated 900,000 state citizens. This tax credit was instituted to help families who make less than $50,000. This is just one of several tax decisions that have harmed Tarheel families. State Republicans have already increased the states sales tax to offset a tax cut for the wealthy. In addition, have cut funding for education and other state services.
North Carolina’s tax reform laws?fail the fundamental tests of fairness and revenue adequacy.
Many economist have cited these reforms will not only be harmful to the poorest North Carolina citizens, they will harm local business and slow the local economy as well. From?thinkprogress.com:
The state’s tax system already favors the wealthiest, as the bottom 80 percent pay between 9 and 10 percent of their income in combined sales and income taxes compared to just 6.5 percent for the top one percent of earners. The plan passed Tuesday would exacerbate that inequity. The North Carolina Justice Center?warns?that lower-income North Carolinian’s would see their tax burden increase under the plan, while the very rich would experience a tax reduction of up to 1.1 percent of their earnings.
If all this sounds like a broken record, it should. This is nothing more than?supply side economics. This is nothing new or innovative. Matter of fact, this regressive approach to tax reform that has been around for some 30 years ?and has been largely discredited as a viable tax policy.?Art Laffer, known as the Godfather of this tax policy approach has been criticized by many who say Laffer is not only grossly misleading in his push for this tax policy approach his theory of trickle down economics is a cornerstone of American economic failure and the very reason for much of the huge deficits we see today and most assuredly the root cause for much of the income inequality we see in America today.
In Closing, the real kicker here is the North Carolina lawmakers allowed this discredited tax policy from its ?discredited champion to be voted into law and a wide demographic of poor North Carolina voters enabled this by voting these radical Republicans into office to implement such insanity. The Koch Brother funded and backed American Legislative Exchange Council [ALEC] ?backed all this with bogus untruthful information which translated once again to an misinformed electorate already chopping at the bit because of other propaganda from ALEC and other right-wing media outlets concerning Obamacare and other issues. Here are the facts.
- Lower state taxes generally do?not?boost the economy.
- State tax cuts do?not?pay for themselves in the form of higher economic growth that generates more revenues.
- Progressive taxes and corporate taxes do?not?inherently damage the economy.
- Taxes generally do?not?cause people to flee a state.
So, with four out of five North Carolinian’s incurring a tax hike because of these recent regressive tax reforms signed into law by Governor Pat McCrory (R) it is a very safe bet that many state citizens voted themselves a tax increase. Surprise, Surprise!