N&O Editorial Endorses Progressive Tax Policy

A recent editorial in the Raleigh News and Observer endorses the creation of a state earned income tax credit in North Carolina.

State Rep. William Wainwright of Craven County says that he and Sen. David Hoyle of Gaston County, both Democrats, will re-introduce legislation to create a state earned income tax credit set at 5 percent of the federal credit. If the bill passed, North Carolina would join 18 other states and the District of Columbia in providing the working poor with this incentive, which benefits people whose wages keep them on the bottom rungs of the economic ladder.

The earned income credit, by contrast, directly benefits the working poor. It encourages low-income people to enter and stay in the job market by offering a tax credit equal to a percentage of what they earn. If the credit exceeds what a worker owes in income taxes in a given year, the difference is returned as a tax refund.

Such assistance has been especially helpful this year because Congress has imposed stricter welfare-to-work requirements. People who receive public assistance should work if they can, but many start out making wages that simply can't support a family. The credit can be a needed safety net for families on the financial edge.

The Center for a Better South’s Doing Better: Progressive Tax Reform for the American South, promotes the state earned income tax credit as a positive tax policy reform.