Dems seek to save tax credit
Posted March 8, 2011 7:22 p.m. EST
Updated March 8, 2011 9:02 p.m. EST
StateHouse and Senate Dems called on Republicans today to protect a tax credit they say helps more than 400,000 low-income working families in N.C.
The Earned Income Tax Credit, or EITC, is a federal and state credit extended to low-income households. It's a unique credit in that it's refundable, which means taxpayers can actually receive a cash refund for it, not just forgiveness of taxes they may owe.
Proponents of the EITC say low-income workers pay out a larger share of their earnings in taxes than the wealthy do, from income to social security to sales and property taxes. They argue the refundable portion is a way to reimburse those families for some of those other taxes.
House Bill 93, sponsored by Davie Republican Julia Howard, would do away with the "refundable" part of the credit.
Republicans say the change would save the state about $52 million a year. But Democrats say it would amount to a tax increase on the state's neediest families.
The measure is scheduled for a hearing in House Finance Wednesday morning at 8:30.
Watch today's press conference here (and sorry about the jumpy video - I'm not much of a cameraman).