One of the most contentious parts of the House revenue package that passed the Finance Committe Tuesday night is the income tax increase on the wealthiest North Carolinians. People who earn more than $200,000 will pay 8.25 percent, up from the current 7.75.
People who earn more than $500,000 will pay 8.5 percent. It is important to note that the higher tax rate will be paid only on the earnings above $200,000 and $500,000.
The tax on the wealthy is being called class warfare, a job-killer, and a host of other things. Largely left out of the discussion is that the wealthiest one percent of taxpayers currently get a break in state and local taxes, paying significiantly less taxes as a percentage of their income than the poorest 20 percent of taxpayers.
You can find all the details in a February 2008 report from the N.C. Budget and Tax Center. The poorest 20 percent, with an average income of $10,000, pay 10.1 percent of their income in state and local taxes.
The wealthiest one percent, with average incomes of $970,000, pay 7.1 percent of their income in taxes.
Millionaires pay a lower percentage of their income in state and local taxes than people living well below the poverty line.
Remind me again why raising taxes on the rich is class warfare.