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EITC in North Carolina: A Tool to Help Working Families and Communities Statewide

Tomorrow, policymakers in the House Finance Committee will consider a proposal to gut the state’s Earned Income Tax Credit. This proposal amounts to a tax increase on working families and is bad for the economy.

House Bill 93 will impact working families in all counties of the state and undermine the consumer spending in these communities that supports an economic recovery. The Budget and Tax Center has analyzed the most recent data from the N.C. Department of Revenue for the 2009 tax year with an eye to capturing the scope of these impacts. The maps below demonstrate the wide-ranging and deep benefits of the state Earned Income Tax Credit to the state.

 

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Of particular note is that the state Earned Income Tax Credit is targeting communities with high poverty rates as well as those communities with high unemployment rates. Those communities that have traditionally experienced economic hardship in the eastern part of the state have some of the highest percent of state EITC returns filed as well the percent of households receiving the state EITC who receive a refund. But communities experiencing significantly high unemployment rates in the Great Recession are also receiving the highest total refund dollars.
All of this means that the Earned Income Tax Credit is a precise, well-targeted program that helps North Carolina’s families and local economies throughout the state.

— Alexandra Forter Sirota, Director, NC Budget and Tax Center