N.C. tax reform hitting seniors hard

From an editorial Thursday in the (Raleigh) News & Observer:

For people who talk so much about taxes, North Carolina’s Republican lawmakers don’t seem to know much about them.

The changes involve tax cuts that favor high earners and corporations. North Carolina’s economy is recovering along with the nation’s economy, but there’s no sign of corporations racing to relocate to North Carolina or wealthy “job creators” creating jobs.

Meanwhile, tax revenues are running below projections, and many retired people are discovering that the tax cuts are a tax hike. The changes reduced exemptions for pensions and eliminated the deduction for medical expenses. As they do their taxes, seniors are howling when they reach the bottom line.

The prospect that seniors may vote their lightened pocketbooks in 2016 has Republicans worried. State Rep. Rick Catlin, a Republican from retiree-heavy Wilmington, is sponsoring legislation to restore the medical expense tax deduction.

Seniors who favor Republicans and are armed with sharp pencils are sending a shiver through the GOP. Expect the medical deduction to return.

But the state’s Earned Income Tax Credit that helped the working poor was allowed to expire in December 2013. Those who lost that tax benefit won’t see it brought back.