Battle looms over tax credit
Published 11:07 am Monday, March 14, 2011
Proponents of the Earned Income Tax Credit (EITC) say keeping this money in the pockets of taxpayers simulates the economy which will help the state of North Carolina recover.
Opponents believe that the tax credit is only a handout for a small portion of North Carolina citizens and eliminating it would save the state $50 million in an already tight budget year.
In between, the state’s Democratic leaders have launched an online petition, one calling on their Republican colleagues to scrap a plan that would raise taxes on 400,000 North Carolina families.
According to information found at www. ncworkingfamilies.com, House Bill 93 and Senate Bill 117 would…“radically alter the North Carolina Earned Income Tax Credit, a tax cut for middle class families who work and have kids. (EITC also aids workers without children who meet certain criteria.) These Republican bills aim to end the refund of the tax credit – a move that would result in a higher tax bill for hundreds of thousands of North Carolinians.”
“Times are tough, and the last thing North Carolina middle class families can afford right now is a tax increase,” said Senator Martin Nesbitt, NC Senate Minority Leader. “Raising taxes by $50 million on 400,000 families will take money out of the pockets of middle class families and hurt our economic recovery. That’s why we’re asking North Carolinians to sign our online petition and tell Republicans: stop the middle class tax increase and keep your promise to ‘hold the line’ on taxes.”
The website claims that over 800,000 North Carolina families qualify for and claim the Earned Income Tax Credit. About half of them – over 400,000 – would see their taxes increase by a total of $50 million if the Republican plan is passed into law. That’s an average tax increase of over $125.
In the Roanoke-Chowan area, EITC is responsible for placing nearly $600,000 in the pockets of working families in the four counties. With the exception of Gates County, one of every three families in the local area receive EITC funding from the state.
According to the latest data available from the North Carolina Department of Revenue, a combined total of 4,766 households in Bertie, Gates, Hertford and Northampton counties received an EITC refund in 2009. That translated into a combined $598,570 returned to those families.
The county-by-county breakdown of those numbers is as follows:
Bertie – 1,385 households receiving EITC for a total amount of $175,934 (39 percent of all county households)
Gates – 576 – $70,897 (23%)
Hertford – 1,411 – $178,872 (34%)
Northampton – 1,394 – $172,867 (34%)