Despite claims by the architects of North Carolina’s failed tax-cut experiment, policy choices since 2013 have not ensured that middle and low-income taxpayers are paying lower shares of their income in state and local taxes. Instead the richest taxpayers—whose average income is more than $1 million—continue to pay 33 percent less in state and local taxes as a share of their income than taxpayers who have averages incomes annually of $11,000, a threshold that aligns with deep poverty.
North Carolina
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ITEP Work in Action October 22, 2018 NC Policy Watch: North Carolina’s Tax Code Isn’t Helping the State’s Growing Inequality
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ITEP Work in Action October 17, 2018 NC Policy Watch: Low-income Tax Payers in NC Pay More of Their Income in State and Local Taxes Each Year Than the Richest Taxpayers
Sales taxes play a critical role in the regressive and consequently inequitable nature of the North Carolina tax system. Like most other states, North Carolina relies on sales and excise taxes (30.7% of the 2018-2019 approved budget) as a primary mechanism to raise revenue. However, in North Carolina, sales and excise taxes are the most regressive taxes when compared to income and property taxes. The lowest 20% of North Carolina workers pay 6.1 percent in sales taxes as a percentage of their income while the top 1 percent pays less than 1 percent in sales taxes as a percentage of their income.
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October 17, 2018 North Carolina: Who Pays? 6th Edition
NORTH CAROLINA Read as PDF NORTH CAROLINA STATE AND LOCAL TAXES Taxes as Share of Family Income Top 20% Income Group Lowest 20% Second 20% Middle 20% Fourth 20% Next… -
ITEP Work in Action September 28, 2018 BTC Report: Income tax rate cap amendment is costly for taxpayers, communities
Imposing an arbitrary income tax cap in the North Carolina Constitution could fundamentally compromise our state’s ability to fund our schools, roads, and public health, as well as raise the cost of borrowing. This could all happen even as the tax load shifts even further onto middle- and low-income taxpayers and the state’s highest income taxpayers — the top 1 percent — continue to benefit from recent tax changes since 2013.
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September 26, 2018 Tax Cuts 2.0 – North Carolina
The $2 trillion 2017 Tax Cuts and Jobs Act (TCJA) includes several provisions set to expire at the end of 2025. Now, GOP leaders have introduced a bill informally called… -
ITEP Work in Action May 31, 2018 NC Budget and Tax Center: Corporations over Carolinians?
Big corporations and wealthy executive have been on quite a run. Corporate profits are at historic levels,[1] stock prices are through the roof, and plush executive pay has become the… -
ITEP Work in Action May 30, 2018 NC Budget and Tax Center: Revenue Options to Support Children’s Educational Success
The General Assembly legislative session begins on May 16, the same day teachers plan a day of action to highlight the unmet needs their students face in the classroom and… -
ITEP Work in Action May 22, 2018 NC Policy Watch: Governor Cooper recognizes North Carolina is in a hole, stops digging
Holding off on another round of tax cuts for the richest taxpayers and profitable corporations and keeping the increased standard deduction and lower rate for the majority of taxpayers will… -
blog May 22, 2018 Most States Have Raised Gas Taxes in Recent Years
State tax policy can be a contentious topic, but in recent years there has been a remarkable level of agreement on one tax in particular: the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies.
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blog May 15, 2018 NC Teachers’ March on Raleigh and the Tax Cuts that Led Them There
Once again, public school teachers are taking a stand for education and against irresponsible, top-heavy tax cuts that deprive states of the revenue they need to sufficiently fund public services, including education.
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ITEP Work in Action April 16, 2018 NC Budget and Tax Center: North Carolina’s Upside Down Tax Code
Tax season comes to a close this week, and Tax Day serves as a good time to reflect on who pays taxes in North Carolina. The income tax is, naturally,… -
ITEP Work in Action December 20, 2017 NC Policy Watch: Devastating consequences if Congress fails to replace DACA in three months
State and local government coffers would also take a hit if Congress fails to pass the Dream Act, or another effective solution. The Institute for Taxation and Economic Policy estimates… -
December 16, 2017 How the Final GOP-Trump Tax Bill Would Affect North Carolina Residents’ Federal Taxes
The final tax bill that Republicans in Congress are poised to approve would provide most of its benefits to high-income households and foreign investors while raising taxes on many low-… -
December 6, 2017 How the House and Senate Tax Bills Would Affect North Carolina Residents’ Federal Taxes
The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. The graph below shows that both bills are skewed to the richest 1 percent of North Carolina residents.
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November 14, 2017 How the Revised Senate Tax Bill Would Affect North Carolina Residents’ Federal Taxes
The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In North Carolina, 50 percent of the federal tax cuts would go to the richest 5 percent of residents, and 13 percent of households would face a tax increase, once the bill is fully implemented.
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November 6, 2017 How the House Tax Proposal Would Affect North Carolina Residents’ Federal Taxes
The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate tax, become more generous over time. The result is that by 2027, the benefits of the House bill become increasingly generous for the richest one percent compared to other income groups.
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October 4, 2017 GOP-Trump Tax Framework Would Provide Richest One Percent in North Carolina with 57.6 Percent of the State’s Tax Cuts
The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in North Carolina equally. The richest one percent of North Carolina residents would receive 57.6 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $512,000 next year. The framework would provide them an average tax cut of $50,440 in 2018, which would increase their income by an average of 3.2 percent.
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ITEP Work in Action August 25, 2017 NC Policy Watch: In N.C., 42% of Trump’s proposed tax cuts would go to the few making more than $1 million
A newly released report confirms that the White House is not really interested in tax reform that helps “ordinary Americans”. Instead, under President Trump’s proposed tax cut plan, “ordinary Americans” will hardly benefit at all, as nearly half of Trump’s proposed tax cuts would go to people making more than $1 million annually.
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ITEP Work in Action August 21, 2017 Budget and Tax Center: Costly Tax Cuts in New State Budget Continue Precarious Road Ahead for North Carolina
The new two-year state budget passed by lawmakers included another package of tax cuts that will further limit the amount of revenue available for public investments. The latest tax cuts will reduce annual available revenue by $900 million and, when combined with tax cuts passed since 2013, result in an estimated $3.5 billion in less annual revenue compared to the tax system that was in place prior to tax changes in 2013.
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August 17, 2017 In North Carolina 42.4 Percent of Trump’s Proposed Tax Cuts Go to People Making More than $1 Million
A tiny fraction of the North Carolina population (0.5 percent) earns more than $1 million annually. But this elite group would receive 42.4 percent of the tax cuts that go to North Carolina residents under the tax proposals from the Trump administration. A much larger group, 50.8 percent of the state, earns less than $45,000, but would receive just 5.9 percent of the tax cuts.
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July 20, 2017 Trump Tax Proposals Would Provide Richest One Percent in North Carolina with 46.5 Percent of the State’s Tax Cuts
Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in North Carolina would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $1,541,500 in 2018. They would receive 46.5 percent of the tax cuts that go to North Carolina’s residents and would enjoy an average cut of $78,880 in 2018 alone.
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blog June 28, 2017 State Rundown 6/28: States Scramble to Finish Budgets Before July Deadlines
This week, several states attempt to wrap up their budget debates before new fiscal years (and holiday vacations) begin in July. Lawmakers reached at least short-term agreement on budgets in Alaska, New Hampshire, Rhode Island, and Vermont, but such resolution remains elusive in Connecticut, Delaware, Illinois, Maine, Pennsylvania, Washington, and Wisconsin.
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blog June 21, 2017 State Rundown 6/21: Crunch Time for Many States with New Fiscal Year on Horizon
This week several states rush to finalize their budget and tax debates before the start of most state fiscal years on July 1. West Virginia lawmakers considered tax increases as… -
ITEP Work in Action June 21, 2017 Failed Tax-Cut Experiment (in North Carolina) Will Continue Under Final Budget Agreement, Pushes Fiscal Reckoning Down the Line
The final budget agreement from leaders of the House and Senate puts North Carolina on precarious fiscal footing, The tax changes that leaders agreed to—which were less a compromise and more of a decision to combine the tax cuts in both chambers’ proposals—make the cost of these tax cuts bigger than what either chamber proposed. Including the new tax cuts,approximately 80 percent of the net tax cut since 2013 will have gone to the top 20 percent. More than half of the net tax cut will go to the top 1 percent.
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blog May 31, 2017 State Rundown 5/31: Budget Woes Spurring Special Legislative Sessions
This week, special legislative sessions featuring tax and budget debates are underway or in the works in Kentucky, Minnesota, New Mexico, and West Virginia, as lawmakers are also running up against regular session deadlines in Illinois, Kansas, and Oklahoma. Meanwhile, a legislative study in Wyoming and an independent analysis in New Jersey are both calling for tax increases to overcome budget shortfalls.