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AP: Many North Carolinians will pay more state taxes in 2014 under new plan

When the N.C. General Assembly passed a controversial overhaul to the state’s taxing system last year, the promise out of the mouths of Republican sponsors was that it would put more money back in taxpayers’ pockets.

But that’s not the case, the Associated Press found today in a factcheck its reporters conducted on the state’s new tax plan.

“It’s true that the state’s income tax rate is going down for every taxpayer in 2014,” the news agency wrote in an article published today. “But that does not mean all taxpayers will actually pay less to the state government over the coming year.”

That premise of lower tax bills, which has been echoed and repeated by Republican Gov. Pat McCrory, was scrutinized closely at the time of the bill’s passage and debate, with many calling foul on the claims including Cedric Johnson of the N.C. Justice Center’s Budget and Tax Center.

BTC data on N.C. tax increases under new plan

BTC data on N.C. tax increases under new plan

Johnson, in a report published in August, estimated that the bottom 80 percent of North Carolina residents will pay more in taxes under the new tax plan while needed services were slashed and the wealthiest in the state would see reductions in their tax bill. (Disclosure: N.C. Policy Watch is also a part of the N.C. Justice Center.)

The Associated Press took another look this week at the changes to the state’s tax code for 2014 and agreed that the tax breaks promised by lawmakers would not materialize for many people in the state.

From the AP’s “Factcheck“:

McCrory praised the GOP-backed tax reform package in a Dec. 13 op-ed piece printed in the state’s largest newspapers.

“Starting on Jan. 1, the income tax rate will go down for every North Carolina taxpayer,” McCrory wrote. “We made our rates more competitive to allow existing businesses to create jobs and attract new businesses to the state. North Carolinians will see more money in their paychecks next year.”

In a Dec. 18 video issued by McCrory’s office to tout his administration’s 2013 accomplishments, the governor said: “North Carolinians will keep more of their hard-earned money thanks to historic tax reform.”

But McCrory failed to mention that he and Republican lawmakers allowed the expiration of the state’s Earned Income Tax Credit, a measure that boosted the income of the state’s poorest workers. The tax reform package also eliminates several exemptions and deductions that benefited working class taxpayers, including a popular program that allowed families a deduction on pre-tax income into a college savings account.

According to a recent analysis by the legislature’s own Fiscal Research Division, a married couple with two children making $20,000 a year will go from receiving a $222 tax rebate in 2013 to owing $40 next year, a net swing of $262.

At the other end of the income scale, a married couple with two children making $250,000 will get a $2,318 tax cut in 2014, according to the analysis.

McCrory communications director Kim Genardo said the governor’s statements referencing the new benefits to North Carolinians shouldn’t be interpreted as applying to all taxpayers.

“He didn’t say ‘every’ or ‘all,’” Genardo said. “You’re taking it literally that we mean every single citizen, and we did not say ‘everyone.’”

Click here to read the entire AP article, or click here to read the BTC’s August analysis about the tax plan.

25 Comments

  1. GOP Rules

    December 30, 2013 at 11:06 am

    I guess this is a good story then, that is the progressive dream to have more taxes being paid!

  2. Bill

    December 30, 2013 at 11:18 am

    “Starting on Jan. 1, the income tax rate will go down for every North Carolina taxpayer,” McCrory wrote.

    OK, I think they all need to get on the same page about what he said.

  3. Bill

    December 30, 2013 at 11:23 am

    This is the problem progressive see:

    According to a recent analysis by the legislature’s own Fiscal Research Division, a married couple with two children making $20,000 a year will go from receiving a $222 tax rebate in 2013 to owing $40 next year, a net swing of $262.

    At the other end of the income scale, a married couple with two children making $250,000 will get a $2,318 tax cut in 2014, according to the analysis.

  4. ML

    December 30, 2013 at 11:56 am

    Duh, you think the GOP cares about the family struggling to make ends meet at 20k? Not a chance, they’ll only make it on the GOP’s radar if they “donate” their entire income for campaign contributions.

    The GOP has no regard for 47-80% of it’s constituents bc it’s all about the money. Otherwise how could they afford to mislead the public with their attack ads and stink tanks? I mean art’s pockets only go so deep…

  5. Gene Hoglan

    December 30, 2013 at 12:25 pm

    Bill:

    McCrory’s wonderful publicist cleared this up already. When he said “every” he didn’t mean “every”. See, the liberal media is taking his recorded statement literally and imputing the agreed-upon dictionary definition of each word using proper context, which is merely an obfuscating tactic the left uses to distort the statements of their opponents.

  6. GOP Rules

    December 30, 2013 at 1:34 pm

    Yeah Gene….kind of like how democrats used to debate the meaning of “is” and “sex” back when Bill Clinton was in power. Oh to be back in those halycon days when Clinton stayed out of the way and chased tail rather than attempting to make the US into a socialist utopia.

  7. GOP Rules

    December 30, 2013 at 1:37 pm

    And being in that bracket below the $47,000 with the miniscule increase, I will gladly pay my fair share. That is what it is about.

    Now….this is settled and established law, we need to do what all progressives require us to do : accept it and go on.

  8. ML

    December 30, 2013 at 4:59 pm

    But what if EVERYONE paid their fair share, especially those that can most afford it? Think of the things we could build and accomplish.

  9. RJ

    December 30, 2013 at 6:17 pm

    I am again grateful that GOPTools is willing to subsidize my yacht purchases by paying more in sales taxes. Talk about holiday spirit! Thanks again!

  10. LayintheSmakDown

    December 30, 2013 at 8:24 pm

    ML,
    They all will be paying their fair share….you make more $$ you pay more $$. That is how it works. Example, you make $20,000 and pay $1,160. You make $2,000,000 you pay $116,000. It doesn’t get much better than that.

  11. LayintheSmakDown

    December 30, 2013 at 8:35 pm

    Also looking at the re-hashed graph, I thought I would re-calculate the effects on those 80%. It is hardly earth shattering to them since in many of the brackets they are only transferring money right back to the government:

    12,000 x .02% increase is $24….I am sure they will get much more than that in official government perks!
    25,000 x .02% increase is $50…still in the realm of government perk offset…
    47,000 x .02% increase is $94…..since these people are considered by liberals to be rich then that is certainly fair share.

  12. Alan

    December 30, 2013 at 10:51 pm

    Now all of a sudden the extreme right is pro progressive tax rates…. another example, like we really needed another, of the Up is Down, Down is Up logic of the GOP. I guess the message will change tomorrow, depending which way the wind is blowing…

  13. ML

    December 31, 2013 at 10:09 am

    The tax is slightly more complicated than that LSD. The GOP knows this which is why you see the earned income tax credit expire but they allow subsidies for corporation who pay zero in taxes, they allow for 75k in deductions for horses and yachts but do little to help the poor. Because guess what, poor people didn’t lobby to add exemption after exemption and tax break after tax break, the 1%ers did that. So maybe they have you fooled, on second thought yes they do with your measly 47k your the perfect sucker for them. You make enough to believe you’ve made something of yourself while they reap all the rewards of your ignorance and gullability.

    Maybe try some LSD, it might open your eyes for once.

  14. GOP Rules

    December 31, 2013 at 3:06 pm

    Alan,
    If that is the case then all taxes that have a baseline number that can change are “progressive”. If that is the case then progressivism is a great idea. In NC the progressive rate of 5.8% on a varying income seems a great idea, and all pay their fair share. Glad to see there is some agreement between the two sides here.

    I am not sure where you get down, up, round and round or whatever. As far as I know Republicans have never proposed that all people pay say $1,000 dollars or some set amount each and that is everyone’s tax burden regardless of income level. Although, that might be a good idea when thinking about it the elected officials would never want to give that much power back to the people.

  15. GOP Rules

    December 31, 2013 at 3:10 pm

    ML,
    It looks like the calculations that LSD is presenting are all based on the graphs and brackets above. Just using your entities’ numbers and you want to move the ball around in a shell game to make a different straw man….typical.

    We need to just wait this thing out, we are already seeing significant economc recovery from the Perdue/Easly disasters with greater job growth and starting tomorrow a more favorable tax climate. I would say unless(when?) Obamacare crashes the economy even more then we are getting set to see a great turnaround where all this whining is for naught.

  16. Skeptic

    December 31, 2013 at 3:44 pm

    GOP Roolz–The only country that has your system (dictating a specific amount) is Russia. Then again, Putin is an authoritarian homophobe just like all you Republikkkans. Warped minds think alike……

    LSD–a few more years under racist pr!cks like Pat McDumbf%ck and “those people” as you call them won’t have any benefits to return. Yahoo!, say the yahoos.

  17. ML

    December 31, 2013 at 4:59 pm

    Will all you civitas interns please learn what a straw man argument is before you just throw it into a post?

    The tax code is more complicated than just looking at income tax. A fact you clearly wish to avoid bc of things like increased sales tax, capital gains taxes, estate taxes or offshore tax free havens. All those things go to lower or raise tax rates and govt revenue without altering the income tax rate. I made a simple point, I did not misrepresent your position in any bit.

  18. ML

    December 31, 2013 at 5:02 pm

    “We need to just wait this thing out, we are already seeing significant economc recovery from the Perdue/Easly disasters with greater job growth and starting tomorrow a more favorable tax climate. I would say unless(when?) Obamacare crashes the economy even more then we are getting set to see a great turnaround where all this whining is for naught.”

    Btw is this what art makes his interns recite before they’re allowed to get dessert? You guys seem to use it a lot for almost every situation, be it racial, economical, or political. I guess it’s all you got. Thanks again for playin toast.

  19. LayintheSmakDown

    December 31, 2013 at 6:27 pm

    I tell you what ML….when you PW interns focus on something other than this straw man “some people will pay $20 more in taxes” argument like it is the end of the world….I will be glad to come refute your arguments. I am not for increasing receipts for the government by one cent,

    If you would like to debate the sales tax and how it has been decreased since the democrats held power then I am all for it. The fact is just ignored here by Policy Watch interns since it continues the narrative that the current NCGA is looking out for the people of NC.

    And ML…I guess Fitzy and Shoefield require you to recite the opposite each day before you enter your cube over there on Dawson Street. Do you and Alan and Skeptic hold hands or is it hard since you are all the same person?

  20. ML

    January 1, 2014 at 2:28 pm

    You still aren’t understanding the concept of a straw man argument.

    “some people will pay $20 more in taxes” is not an example of the illogical fallacy of a strawman argument. Here’s an example.

    me: I like the rainy days.
    you: So you want it to rain all the time and flood the entire world?

  21. Alan

    January 2, 2014 at 12:42 pm

    I think LSD is usually clutching at straws anyway??? When in doubt, throw out the Straw Man argument, according to Fart Pope.

  22. GOP Rules

    January 2, 2014 at 3:32 pm

    Alan, did you make that one up or did Fitzy?

  23. Alan

    January 2, 2014 at 4:53 pm

    It’s all me… I quick like that one.

  24. […] state lottery Twitter account pointed out that the state’s new flat 5.8 percent income tax, which eliminated a progressive tax structure where the poorest pay a lower percentage of income taxes than those with higher incomes, is a bonus […]

  25. LayintheSmakDown

    January 3, 2014 at 9:44 pm

    What the heck is that last comment supposed to mean? As the EIC and race card dealer I think this phrase should have more editing…..oh wait are you pointing out where you did not edit Sarah’s post?

    … I quick like that one.

    =Alan