Senate Bill 116, Putting North Carolina Back to Work Act, supports the recovery of the economy through removing barriers to work and providing targeted tax relief for the unemployed and the businesses that kept people employed utilizing a federal Paycheck Protection Program (PPP) loan. Government shutdowns and interventions over the past year created the problems this bill seeks to address. Civitas Action believes the vote for freedom is a vote YES on SB116.
Everyone is inclined to respond to incentives. North Carolinians that have hesitated to return to work after the pandemic are responding logically to the federally-inflated unemployment benefit amount. This bill would remove North Carolina from that short-term program to help North Carolinians get back into long-term economic stability through employment.
This bill also benefits those who have been unemployed by temporarily waiving state income taxes on the first $10,200 received from unemployment benefits for individuals with incomes below $150,000. While carving up the tax code is not usually good policy, in this case it is justified because government shutdowns are the cause for most people’s need to go on unemployment in the past year. The state tax exemption only applies to 2020 – a one-time fix for a one-time problem induced by the government shutdowns.
Finally, the bill would allow businesses that received a federal PPP loan to deduct the expenses of the loan from their income tax calculations. This aligns North Carolina with federal policy on the matter and provides tax relief for businesses that struggled during the government-mandated shutdowns but continued to keep North Carolinians employed.
The response of the federal and state governments to the 2020 COVID-19 pandemic could have ripple effects in our economy for years to come. This bill shows an effort by state government to mitigate the negative impacts caused by government shutdowns and perverse incentives created from the pandemic response. For that reason, Civitas Action believes the vote to defend freedom is a vote YES on SB116.
Civitas Action will grade the Second Reading floor vote on this legislation in the House or Senate.
Civitas Action is a 501(c)(4) non-profit that educates and informs North Carolinians on policy issues and the actions of their elected officials.