North Carolina

“Key Findings: • North Carolina’s transportation budget faces a funding gap. Since the Great Recession, North Carolina has not experienced gradual increases in revenue collections from the gas tax as generally experienced in pre-recession years. The purchasing power of construction and maintenance dollars has also eroded. • Despite revenue shortfalls for transportation projects, the price-based […]

EXECUTIVE SUMMARY The state sales tax in North Carolina represents nearly 30 percent of the state’s total revenue each year. In 2011, the states sales tax generated $5.9 billion in state revenue. The sales tax is regressive, which means that it asks more from those with the least ability to pay. Lower-income families spend a […]

“KEY FINDINGS Every household pays taxes. Even the poorest fifth of American households paid an average of one-sixth (16 percent) of their total income in federal, state, and local taxes in 2009. The wealthiest 1 percent of households in the country, with annual incomes averaging more than $1.3 million, paid less than one-third (30.7 percent) […]

Low-wage workers often face a dual challenge as they struggle to make ends meet. In many instances, the wages they earn are insufficient to encourage additional hours of work or long-term attachment to the labor force. At the same time, most state and local tax systems impose greater responsibilities on poor families than on wealthy ones, making it even harder for low-wage workers to move above the poverty line and achieve meaningful economic security. The Earned Income Tax Credit (EITC) is designed to help low-wage workers meet both those challenges. This policy brief explains how the credit works at the…

One of the main economic goals of most state policymakers is, quite sensibly, to attract businesses to their state. But, all too often, these policymakers have been encouraged to think that tax cuts make the best bait. A growing body of literature reminds us that taxes themselves create public infrastructure that spurs investment and improves the quality of life for businesses and workers alike. Communities that illustrate a strong commitment to public institutions like good schools, well-built transportation systems, and quality police and fire protection will ultimately have an advantage in attracting new business investment. This policy brief looks at…

Over the past several decades, state corporate income taxes have declined markedly. One of the factors contributing to this decline has been aggressive tax avoidance on the part of large, multi-state corporations costing states billions of dollars. The most effective approach to combating corporate tax avoidance is the use of combined reporting, a method of taxation currently employed in more than half of the states with a corporate income tax. Eight states have enacted legislation to institute combined reporting within the past five years. Commissions and lawmakers in several other states, such as North Carolina, Maryland, Rhode Island and Kentucky,…

Retail trade has been transformed by the emergence of the Internet. As the popularity of "e-commerce" (that is, transactions conducted over the Internet) has grown, policymakers have engaged in a heated debate over how state sales taxes should be applied to these transactions. This debate is of critical importance for state lawmakers because sales taxes comprise close to a third of all state tax revenues.

With the state’s gas tax pegged to the price of gasoline, North Carolina is scheduled to raise its gas tax rate on July 1. This increase was entirely predictable, but is understandably controversial. Unfortunately, the debate surrounding what to do in the wake of this increase has been far too narrow, focusing on just two […]

In just the last few weeks, Arkansas and Illinois joined New York, North Carolina, and Rhode Island in enacting legislation requiring some online retailers, like Amazon.com, to collect sales taxes on purchases made by their state’s residents. Vermont’s House of Representatives recently passed similar legislation, and Arizona, California, Connecticut, Hawaii, Massachusetts, Minnesota, Mississippi, Missouri, New […]