NC Budget and Tax Center

Who Pays Taxes in North Carolina

Who Pays Taxes in North Carolina

Today the Institute on Taxation and Economic Policy (ITEP) released its 2013 Who Pays? report, which provides a state-level analysis of how much state and local taxes are paid as a share of income by income groups. For North Carolina, ITEP’s analysis highlights the state’s upside-down tax system, in which middle- and low-income families pay more in taxes as a share of their income than wealthy families.

 Who Pays NC Chart 2013

The report also highlights that the largest share of taxes paid by low- and middle- income families in North Carolina go towards the sales tax, which ITEP notes is the most regressive tax within state tax systems. Families in the lowest income group pay six times more of their income in sales taxes than the wealthiest families.

Senate leadership recently announced its support for eliminating personal and corporate income taxes and relying heavily on the sales tax to raise most of the more than $12 billion in lost revenue. The ITEP analysis makes clear who would bear much of the tax load from this huge tax shift. Low- and middle-income families would see an even larger share of their income go toward state and local taxes. Consequently, the state’s already upside-down tax system would be made even worse.

Check Also

NC Senate proposal would expand the sales tax

Correction, posted May 19: The Budget and Tax ...

Top Stories from NCPW

  • News
  • Commentary

The House unveiled pieces of its budget Thursday morning at various appropriation committee meetings [...]

A key House committee signed off on the chamber’s public school budget report Thursday, despite Demo [...]

Harold Brubaker, the former Republican House Speaker turned powerful lobbyist, tried to ram through [...]

A bill to limit local regulation of small cell towers is moving to a full House vote, despite concer [...]

The most shameful thing about the disastrous budget passed by the Senate two weeks ago is not the vi [...]

Court setbacks, public opinion, progressive activism and Trump bode ill for NC conservatives Profess [...]

So, the question as always comes down to one of vision. The elected chieftains who decide how much m [...]

2.8 billion---amount in dollars of needs in communities across the state for rebuilding efforts from [...]

Featured | Special Projects

Trump + North Carolina
In dozens of vitally important areas, policy decisions of the Trump administration are dramatically affecting and altering the lives of North Carolinians. This growing collection of stories summarizes and critiques many of the most important decisions and their impacts.
Read more


HB2 - The continuing controversy
Policy Watch’s comprehensive coverage of North Carolina’s sweeping anti-LGBT law.
Read more