Sen. Phil Berger
North Carolina Tax Credit for Working Poor
Submitted by George Pence on Wed, 01/03/2007 - 1:52am.
Recently a hint was dropped by Governor Easley that he'd like the Legislature to consider granting a tax credit for the working poor as an alternative to allowing the one-quarter percent sales tax to lapse. Republicans, like minority leader Sen. Phil Berger, immediately took a shot at the governor's trial balloon. However, the idea now seems to be gaining real traction in Raleigh.
In the past the legislature has give the idea a cold shoulder, even though a version of it has been enacted in nineteen other states. Accounting for the warmer reception this time around is a budget forecast with an estimated surplus between $200mm to $260mm, while the cost of the tax credit for the working poor is estimated to be between $70mm to $140mm.
Of course the continued surplus depends on that one-quarter percent sales tax as well as a temporary state income tax surcharge, both of which are set to expire on July 1st. However, Gov. Easley seems to be looking only at the continuation of the sales tax as the single revenue source for the tax credit.
