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Estate tax repeal wins approval of House panel

North Carolina is moving to eliminate its estate tax under legislation that won approval along party lines in a House committee Wednesday.

Republican state Rep. Edgar Starnes, the House GOP leader, said the state tax on the value of estates upon death is "an economic policy that just punishes people because they are trying to save things." But Democrats countered that it only applies to the most wealthy and provides needed revenue for state programs.

The state tax applies to estates with a value over $5.25 million or $10.5 million for a married couple. The rate starts at 0.8 percent and increases to 16 percent for the largest estates.

The estimated price tag for Pat McCrory's tax plan: $2 billion to $11 billion

The most important numbers in Sunday's story about the taxes in the governor's race: $2 billion to $11 billion.

That is the estimated price tag for Republican Pat McCrory's tax plan. The N&O analyzed tax data, confirmed by state fiscal researchers, to arrive at the estimated cost -- key word being "estimated" because McCrory has released no specifics on exactly how he wants to change the state's tax burden.

For those interested, here's how we arrived at those numbers read below.

Conservative group uses 'death tax' as fundraising tactic

UPDATED: It's an election year -- and you know what that means: the resurgence of the "death tax" debate. The conservative Civitas Institute sent a missive last week to supporters reviving the debate ahead of the legislative short session, saying it's time "to have a fact-based conservation about a confiscatory and immoral tax that is destroying jobs all across our state and country."

Screaming for "immediate and urgent help," the email asked supporters to donate to Citivas as the group puts pressures on the state legislature's Revenue Laws Study Committee to amend the estate tax, which levies against assets transfered upon a person's death. The email says Gov. Bev Perdue and Democratic lawmakers want to decrease the $5 million estate tax asset exemption to $1 million -- "just like Obama and Pelosi." (The federal exemption level will change to $1 million in 2013. Read more about it here.)

What it doesn't mention: Republicans control the N.C. General Assembly -- but even top GOP lawmakers are reticent to make a move at this point.

Early look at estate tax repeal effort

State lawmakers took their first look today at a proposal to repeal North Carolina’s estate tax.

Advocates for the poor say doing away with the tax would only help a small sliver of the state’s wealthiest people. But conservatives, who historically oppose the “death tax” in the first place, say steps must be taken because more estates will be taxed beginning in 2013 due to a change in federal law.

The state and federal governments currently tax estates valued at more than $5 million. That amount drops to $1 million in 2013, exposing more families to the tax on a relative’s assets when they are transferred upon death.

All of the estate taxes paid to the state in a graduated rate are currently allowed as a credit against the federal tax. But if North Carolina repeals its tax, then that money would go to the federal government.

Legislative staff has estimated that the full impact of that change would amount to a loss to the state of about $170 million by the 2014-15 fiscal year.

Tar Heels: Keep the "grave robbers" away from me

Most North Carolina voters say they don't like the estate tax, according to a new poll.

The state levies a tax of up to 16 percent on assets above $5 million including businesses, homes and other assets when a person dies. That is in addition to the 35 percent federal estate tax.

Sixty-six percent said they oppose the estate tax, and 25 percent said they support the tax, according to a new poll conducted for The Civitas Institute, a Raleigh-based conservative advocacy group.

The spin: "Voters across North Carolina widely recognize the inherent immorality of turning revenue department officials into grave robbers," said Brian Balfour, a policy analyst for the institute. "Hopefully, the state lawmakers will recognize the near-universal opposition to the state death tax and act to end this gruesome practice.

The poll of 600 likely 2012 North Carolina voters was conducted Oct. 17-18 and had a margin of error of plus or minus 4 percentage points.

Hagan unveils education plan

Kay Hagan wants to increase federal spending on education.

The Democratic candidate for Senate unveiled her education plan Wednesday, calling for more money for No Child Left Behind, increasing spending on early childhood education and boosting tax credits for college.

She said she would pay for her education proposals by freezing the estate tax at its 2009 level, saying that will provide $175 billion over 10 years.

The tax is on a schedule to be repealed in 2010, though it could return the following year if Congress doesn't make the repeal permanent.

Hagan held a roundtable talk in Charlotte Wednesday with members of the historically black college community. (AP

Chelsea answers audience questions

Chelsea Clinton dived into specific programs her mother has proposed.

After a brief introduction at the Young Democrats convention today, the former first daughter began answering audience questions on a variety of topics.

She earned loud applause from the audience when she said that Hillary Clinton has proposed eliminating the Free Application for Federal Student Aid form, which college applicants must fill out in order to receive college aid, in favor of a checkbox on your tax form.

Among other things, she said that Clinton would forgive student loans for people who work in public service jobs, create universal health insurance, end the war in Iraq, expand the AmeriCorps program, reinstate the estate tax for people with assets of more than $7 million, make school lunch programs available year-round, reform food stamps and tie the Earned Income Tax Credit to inflation.

In response to a question about seating the Florida and Michigan delegates, Clinton said that the former has an "unfortunate" history of not counting votes.

"I wish that I were standing here after seven years of President Gore," she said.

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