NC Budget and Tax Center

State legislative leaders said tax plan changes were supposed to help most North Carolinians, while groups like the Budget & Tax Center cast skepticism at those claims, predicting that the average North Carolinians would see their share of the tax load increase as the richest in the state enjoyed tax breaks.

So what happened in your household? Did you see your state income taxes go up or down this year? How did it affect your family finances? Was the change worth the broader impact on your community and public services?

We want to hear from North Carolinians filing their taxes or preparing taxes for others. With the new Policy Watch feature Your Soapbox — The Tax Shift, we’re hoping to lift up the stories of those who have been most affected by the tax changes and what that means for their quality of life, their communities and public services. We are already hearing personal stories from people and their families who stand to be affected by the tax shift. One North Carolinian writes:

I am paying almost as much to the state in income taxes as I do to the federal government. For what? All I hear about is the state cutting services like unemployment, etc., for people like myself in the lower end of the economic scale. What I am getting for my tax dollar, exactly, except more grief?

Others are already seeing massive increases in their North Carolina income taxes. One family saw a whopping 564% increase between 2013 and 2014; instead of owing $251, this year they owe $1,415.00.

My (Stroke Victim) And my wife’s (Asthmatic) medical expenses for 2014 averaged $952.92. Medical expenses were not allowed as a deduction on the 2014 NC SIT [state income tax].

The NC Legislature also eliminated the Personal Exemption of $2,500 per person. Our income from Pensions, Social Security, and small investments increased 1.034% from 2013 to 2014. We have been significantly impacted by the 2014 SIT changes and definitely were not considered by Governor McCrory at the signing of the Bill when he stated “Everyone will benefit some from this bill.”

This is just the beginning of what will be likely be a widespread impact of the tax plan, one that will be felt by North Carolinians from across the state and from all walks of life.

Share your story using the submission form here. If you have photos, videos or other media you would like to include, please email them to Julia Hawes at


The fallout from our nation’s decades-long effort to slash taxes on wealthy individuals and profitable corporations (and the public structures those taxes once provided) continues to spread. The Washington Post reports that the growing gap between the super rich and everyone else is directly and negatively impacting state government budgets:

Income inequality is taking a toll on state governments.

The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday by Standard & Poor’s.

Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. That trend can mean a double whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue….

Rising income inequality is not just a social issue,” said Gabriel Petek, the S&P credit analyst who wrote the report. “It presents a very significant set of challenges for the policymakers.”

Stagnant pay for most people has compounded the pressure on states to preserve funding for education, highways and social programs such as Medicaid. The investments in education and infrastructure also have fueled economic growth. Yet they’re at risk without a strong flow of tax revenue.

Meanwhile, this week’s most stunning visual of the nation’s mushrooming inequality comes from the U.S. Federal Reserve, courtesy of the good people at Too Much Online: Read More

NC Budget and Tax Center

This tax season marks the final year North Carolina taxpayers will file their income taxes under the state’s old tax code. By next year the increased tax load for many North Carolina taxpayers will be apparent as a result of the tax plan passed by state leaders last year.

Today, the Budget & Tax Center released a report that highlights how the tax plan passed last year shifts the responsibility of paying for public investments to middle- and low- income taxpayers while providing generous tax cuts to the wealthy and profitable corporations. The report highlights various elements of the tax plan that fundamentally changes the state’s tax system and, subsequently, who pays taxes in North Carolina.

The tax plan passed last year replaces the existing graduated personal income tax rate structure with a flat tax rate that will largely benefit wealthy taxpayers who will now pay a much lower income tax rate. A number of tax provisions that benefit middle- and low-income families – such as the personal exemption and child and dependent care credit – are eliminated under the tax plan. Read More


ff-8292013It’s depressing as hell, but everyone who cares about North Carolina public policy should make this new report by the N.C. Budget and Tax Center’s Cedric Johnson: “Who Pays in 2014” a part of their Tax Day reading list.

As Johnson reports:

“Changes are coming to who pays taxes in North Carolina, and the news is not good for middle- and low-income taxpayers. This tax season marks the final year taxpayers will file their income taxes under the state’s old tax code and by next year it will be apparent to many taxpayers that the tax plan has not just reduced available dollars for investing in core public services, but also has increased the tax load for many. Read More


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.

Read More