North Carolina is among the states with the highest income inequality in the country, according to a new report from the Center on Budget and Policy Priorities. North Carolina ranks 14th in the country, with its richest residents— the top 5 percent of households— having average incomes 14.71 times as large as the bottom 20 percent of households.
These findings come after North Carolina policymakers gathered last week to address the damage of the Hurricane Matthew and ignored calls to fix North Carolina’s upside down tax code by enacting a surcharge on taxable income over $200,000 and keeping the corporate income tax rate at the already-too-low 4 percent.
As the researchers find, this kind of failure to enact progressive tax policy not only loses the state much needed revenue now and in the long-term, it can also make inequality worse.
The report offers recommendations about how state tax policies can be used to begin to reduce inequality.
- Retain or expand taxes on inherited wealth, such as the estate tax.
- Eliminate costly and ineffective tax breaks for corporations
- Enact or expand earned income tax credits, which boost incomes among low-and moderate-wage working families.
- Maintain an overall tax system that raises sufficient revenue to pay for the building blocks of shared prosperity.
For North Carolina, these recommendations signal we have made the wrong choices in recent years to ensure the economy works for everyone. Instead, our policymakers have made the tax code work for the state’s wealthiest and powerful.
In the year ahead, let’s hope our legislative leaders begin to recognize that working North Carolinians and those struggling in today’s economy deserve a tax code that doesn’t create more barriers to their well-being.