As lawmakers work to change the state’s tax code, there has been renewed discussion of who pays taxes in North Carolina. Creative storytelling by legislators won’t change what we already know: every household in North Carolina pays taxes.
We’ve been doing a lot of myth busting around tax reform, including a point made earlier today by a legislator on the House floor. This member claimed that all taxpayers would be better off under this plan compared to the current tax code. This would be great news because currently low- and middle-income families pay a greater share of their incomes in state and local taxes compared to high-income families. But again, the facts just don’t support the member’s claim.
The chart below shows that the joint tax plan does not require the state’s wealthiest residents to pay as much as a share of their incomes in state and local taxes as the very poorest taxpayers pay. The wealthiest taxpayers will experience a drop in taxes paid as a share of their income while everyone else experiences an increased share.
Indeed, this tax plan not only fails to be comprehensive tax reform but also fails to meet the criterion of fairness.