February 22, 2013
Tax cuts for multi-millionaires, hikes for the poor
The North Carolina Justice Center is raising the alarm about possible repeal of our state’s Earned Income Tax Credit (EITC) for working families – AND – North Carolina’s estate tax on multi-million-dollar estates as bills to do both advance in the state legislature:
The state estate tax is a critical tool that supports broader economic opportunity and wealth-building in North Carolina. It also addresses the upside-down nature of our state’s revenue system, since it affects very few North Carolinians – those with multi-million-dollar properties.
Unfortunately, the House Finance Committee today passed a total repeal of the estate tax. It is worth considering the impact such a radical policy shift would have on North Carolina’s finances and economy.
In 2010, a mere 123 North Carolina estates in total were impacted. That was only 2 out of every 1,000 decedents in 2010. Under current federal law, the move to a higher threshold of $5.25 million will mean even fewer estates will be affected.
It is well worth noting that while this move would provide a tax cut for a handful of estate beneficiaries, efforts are being made simultaneously to reduce the value of the Earned Income Tax Credit, which would impact over 900,000 individuals in North Carolina who earn less than $52,000 a year.