NC Budget and Tax Center

No, not all taxpayers come out ahead under tax plan

When the General Assembly’s Revenue Laws Committee met this morning to continue efforts to fix various problematic aspects of the tax plan signed into law by Gov. McCrory earlier this year, there was one key takeaway that shouldn’t have surprised anyone: contrary to the claim by proponents that all taxpayers would benefit from the income tax changes, not all taxpayers will receive a tax cut. 

When asked by the committee to confirm that all workers will benefit from the recent income tax changes, a General Assembly Research Division staffer informed the committee that there will be winners and losers and that some North Carolinians will see their state income taxes go up. The fact that the tax plan would ultimately produce winners and losers was known and acknowledged by the Research Division and legislators throughout the tax reform debate, the staffer noted.

And this is just taking into account changes made to the personal income tax, not the sales tax.

When ALL tax changes – income AND sales tax changes – are taken into account, middle and low income taxpayers who make less than $84,000 (the bottom 80 percent of taxpayers) on average will see their total state and local taxes increase, creating a tax code that favors the wealthy even more than before. This is the reality of the tax plan.

Hopefully this response by the General Assembly’s Research Division will convince proponents of the tax plan to finally acknowledge that not all taxpayers will receive a tax break under the plan.

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