This is the second of a six-part blog series. (See Part 1)
What would the House tax plan mean for North Carolina taxpayers? In these blog posts, we highlight the experience of sample taxpayers under the House tax plan. In conjunction with a distributional analysis of the tax plan which gives a better picture of the full impact, these fictional but true to life profiles will demonstrate that middle-, fixed- and low-income taxpayers would lose under this plan while the wealthiest will gain.
Who really benefits from House tax plan?
Angela and Todd live in the coastal region of North Carolina and the married couple has two kids, one which has a disability. Todd works as an assistant manager at a manufacturing plant and Angela is a stay-at-home mom and cares for their disabled child as well as their 3-year old son. Angela started a home-based hand crafting business last year and together the couple earns around $41,000 in income.
Under the House tax plan, this household would see its tax load increase compared to what it would pay under current tax laws. Under the House tax plan, elimination of the personal exemption allowance would increase the family’s taxable income by about $4,000 and expanding the sales tax base to include more good and services means the couple would also spend a larger share of its income on sales taxes. As the couple works to meet their family’s needs, they wonder who actually benefits from the tax plan that is touted as a great thing for North Carolina.