Proponents continue to make the claim that all North Carolinians will benefit from changes in the tax plan signed by Governor McCrory earlier this year. The reality is that the tax plan includes costly income tax rate cuts and the elimination of credits and deductions that will mean 35 percent of taxpayers will pay more in income taxes. When ALL tax changes – income AND sales tax changes – are taken into account middle and low income taxpayers with income below $84,000 (the bottom 80 percent of taxpayers) on average will see their total state and local taxes increase, making the tax code even more upside down.
One of the particularly common refrains is that families will be protected because the standard deduction is doubled. However, for many, the doubling of the standard deduction is not sufficient to make up for the loss of the personal exemption, the refundable state Earned Income Tax Credit and other deductions and credits.
In fact, the first dollar of income is taxed sooner than under current tax law. Read More