North Carolina Gov. Pat McCrory (R) today signed a law that imposes severe cuts to his state’s unemployment insurance program, a change that will also cost jobless workers in the state access to the federal unemployment compensation program.

McCrory’s signature earned him a rebuke from the National Employment Law Project, which said in a release that the law will result in “the most severe cuts to both state and federal unemployment insurance of any state in the nation”:

These heartless cuts, in the state with the fifth-highest jobless rate in the nation, at 9.2 percent, show a shocking disregard for 400,000 unemployed North Carolinians and their families, many of whom will now go from struggling to barely make ends meet to outright struggling to survive. The immediate pain of these cuts will fall on North Carolinians unfortunate enough to lose work through no fault of their own in a weak economy where jobs are scarce. But the entire state will take a hit from the loss of hundreds of millions of dollars in spending at local businesses that would’ve boosted the local and state economies.

The law reduces the maximum benefit allowed from $535 a week to $350 while cutting the number of weeks an unemployed worker is eligible for the program from 26 to 20. As a result, 170,000 jobless North Carolinians will also lose access to $780 million in federal unemployment funds. The average unemployed worker in the United States has been off the job for 35 weeks, meaning many jobless workers will now face the prospect of searching for a new job without access to a safety net program.

Republican state senators have touted the law as “re-employment” program, even though research suggests that workers who receive unemployment benefits search harder for jobs than those who don’t. McCrory, meanwhile, praised the fiscal responsibility of the law, which will allow North Carolina to pay back money owed to the federal government a measly three years earlier than it would have under the old program.

The Republican-controlled North Carolina state senate overwhelmingly approved legislation to slash the state’s unemployment insurance program Tuesday, reducing the amount of aid unemployed workers can receive and also the number of weeks they will be eligible to receive it. The legislation reduces the maximum benefit from $535 a week to $350, while reducing the time workers can receive aid from 26 weeks to 20.

The cuts will also cost unemployed North Carolinians access to the federal unemployment insurance program, which is based on state programs. The change will cost 170,000 North Carolinians a total of $780 million in federal funds, adding to the total they will lose in state funds. North Carolina’s unemployment rate is 9.2 percent, more than a percentage point higher than the national rate, but proponents of the legislation say it will help workers find jobs faster, Reuters reports:

“What this really should be called is a re-employment rather than an unemployment bill,” said Republican state Senator Bob Rucho, a sponsor of the measure. “We’re trying to put North Carolinians back to work.“

The average unemployed worker has been off the job for 35 weeks, meaning North Carolina will now fall far short in helping many of its jobless residents. And Despite Rucho’s assertions, and despite typical Republican concerns that programs like unemployment compensation cause a “culture of dependency,” studies show that workers who receive unemployment insurance look harder for jobs than those who do not. More likely, the bill will simply make the lives of unemployed workers even harder, preventing them from falling back on unemployment aid and cutting America’s already-stingy unemployment program even closer to the bone.

If the bill is approved and signed by Gov. Pat McCrory (R), who has sign he will sign it, North Carolina will become the seventh state to make cuts to unemployment insurance.

The poorest Americans are subject to a tax rate at the state and local level that is twice as high as the tax rate paid by the wealthiest earners thanks to “fundamentally unfair” state tax laws, according to a new report from the Institute on Taxation and Economic Policy (ITEP). Middle-class taxpayers also pay higher effective rates than the wealthy.

When state, local, property, and sales taxes are taken into account, the poorest 20 percent of Americans pay an average effective tax rate of 11.1 percent, the report found. The middle 20 percent pays a 9.4 percent rate, while the rate for the top 1 percent is just 5.6 percent. The lack of progressive income taxes and an over-reliance on consumption taxes are the primary culprit, the report says.

In the 10 most regressive states, the poorest 20 percent pay a rate as much as six times as high as the rate for the richest 1 percent. Four of those states — Washington, Texas, Florida, and South Dakota — have no income tax; one, Tennessee, has a limited income tax that only applies to dividends and interest. In these five states, half to two-thirds of revenue comes from sales and excise taxes, well above the national average of one-third.

Still, Republicans across the country are pushing tax plans that would replace income taxes — typically the only form of progressive taxation at the state level — with sales taxes. Republicans in Nebraska, Kansas, North Carolina, and Louisiana have advanced such plans, even though their state tax systems are already regressive.

In Louisiana, worst of the four, the poorest 20 percent pay 9.2 percent of their income in sales taxes, while the wealthiest 1 percent pay just 1.3 percent. Even in North Carolina, the best of the four, the poor pay six times as much of their income in sales taxes as the richest one percent. Shifting to a tax code that relies solely on sales taxes would make these states even worse.

North Carolina Republican lawmakers, following on the heels of Gov. Bobby Jindal (R-LA) and Gov. Sam Brownback (R-KS), have proposed eliminating their state’s income tax and corporate tax, replacing them with an expanded sales tax. Such a move is highly regressive, pushing taxes onto those lower on the income scale who are likely to spend most or all of their income.

The state’s Republican governor though, seems to be wary of the plan, with his budget director admitting that it would “absolutely” be regressive:

Gov. Pat McCrory’s budget director distanced the Republican chief executive from a proposal to eliminate income taxes in North Carolina and expressed his own “great concerns” with the concept being floated by leading GOP lawmakers. [...]

In particular, Pope cited a concern that the higher sales tax is “absolutely, no doubt” regressive, meaning it would hurt low-income taxpayers the hardest. He said it amounts to a gross income tax “without any regard to whether you are making any money.” And he worried about upsetting the current three-tier system of income, sales and properties taxes, calling it “fairly balanced.”

The North Carolina Justice Center’s budget and tax project found that the plan proposed by the GOP would “provide a significant windfall to the wealthiest 20 percent of state taxpayers while requiring low- and middle-income households to pay more. A family earning $24,000 a year would see its taxes rise by $500, while one earning $1 million would get a $41,000 break.” This chart shows the change in taxes as a share of income for various income levels:

Gov. Bobby Jindal (R-LA) last week tentatively endorsed a plan that would eliminate his state’s income and corporate taxes, replacing them with an increased sales tax. Such a move would disproportionately impact the poor, in a state where the tax code is already tilted against those with lower incomes.

But Jindal is not alone in this enthusiasm for pushing taxes down the income scale. North Carolina is also looking at replacing its income tax with an expanded sales tax, as Reuters noted:

“We have no choice but to make change,” said Bob Rucho, a Republican state senator in solidly Republican North Carolina, who is leading a push in that state for major tax changes.

Rucho and other like-minded lawmakers have a plan to do away with all state individual and corporate income taxes. The plan would replace lost revenue with a new business license fee and a higher sales tax on goods and services not now taxed by the state, such as legal, accounting and spa services, and food. [...]

Rucho’s plan would remake the North Carolina budget, which now derives 65 percent of its $18.5 billion in total tax revenues from individual income and corporate taxes.

To make up for that much lost revenue, the state sales tax rate would have to rise to 6.53 percent from 4.75 percent, according to a supportive study done by a consulting firm run by Arthur Laffer, a former adviser to Republican President Ronald Reagan and one of the fathers of “trickle-down” economics.

The Tarheel state’s incoming governor, Pat McCrory (R), has called for tax reform, but has yet to embrace any specific proposal.

North Carolina’s tax system already benefits the well off, with the richest 1 percent paying 6.8 percent, compared to 9.5 percent for those making less than $17,000, according to the Institute on Taxation and Economic Policy. Shifting to a larger sales tax will hit low-income residents the hardest, as they spend a much larger percentage of their income on basic needs. Tacking the sales tax onto food will make this change even worse for those at the bottom of the income scale.

Such a shift would also be bad for North Carolina’s economy. As Alexandra Forter Sirota of the North Carolina Justice Center wrote, “relying only on consumption taxes would make our revenue system less stable. When the next downturn hits and consumer spending plummets, North Carolina’s revenue would plummet along with it with no other tax to counter-balance its decline. That would trigger even harsher cuts to education, health care and public safety than we’ve seen in the last few years.”