BTC’s analysis of SB 325 uses a more robust model developed by the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan organization. ITEP’s microsimulation tax model calculates tax revenue yield and incidence, by income group, of federal, state and local taxes. The model is used in states across the country to analyze state tax proposals and to assess the impact of tax policies on issues of public concern. ITEP’s model segments North Carolina taxpayers into five equally split income groups based on actual tax returns and total estimated incomes (and breaks down the top 20 percent of taxpayers since income is so concentrated at the top of the spectrum). FRD informing lawmakers that a hypothetical taxpayer with adjusted gross income of $200,000 would get a tax cut under the plan provides no insight into the distributional impact of the tax plan, such as where that taxpayer falls along the income spectrum (certainly not in the middle). The ITEP model, however, highlights that this hypothetical taxpayer is closer to the top 10 percent of income earners in the state.