President Joe Biden’s historic move to forgive $10,000 for student loan borrowers (and up to $20,000 for Pell Grant recipients), and exempt it from federal income tax was a huge win for millions of Americans, including in North Carolina. Yet, state Republicans are blocking the crucial measure to exempt it from state taxes.
According to The News & Observer, the problem lies with the Republican-led North Carolina General Assembly, which did not adopt a section of the Internal Revenue Code that would include student loan forgiveness as non-taxable income.
North Carolina Gov. Roy Cooper has asked legislators to change state law to “fix this fundamental unfairness for many hardworking people who will get hit hard (by the state taxes)”.
Despite the governor’s call to change the law in the interests of North Carolinians, Senate leader Phil Berger stated to reporters that he would not take any action.
Coincidentally, state Republican leaders have attempted to phase out corporate income tax by 2025, and approved tax exemptions for those who received forgiveness from their PPP loans.
The hypocrisy is on full display with state Republicans’ refusal to ensure more than 1.19 million eligible North Carolinians for student loan forgiveness are given further relief. At the same time, wealthy corporations get away without paying their fair share.
If state Republicans gain a supermajority in the legislature in the upcoming election, this trend of prioritizing tax cuts for corporations over the well-being of North Carolinians will continue and may get worse.
For measures such as student loan relief, abortion access, funding of public schools, and many others, state legislative races will be more critical than ever in determining the passage of key policies for our state.