fbpx

This simple graph sums up NC’s “tax the poor, feed the rich” tax system

In case you missed it on Monday, the latest edition of Prosperity Watch from the N.C. Budget and Tax Center neatly sums up one the most pernicious aspects of North Carolina’s tax system: its favoritism for the rich.

Tax season comes to a close this week, and Tax Day serves as a good time to reflect on who pays taxes in North Carolina. The income tax is, naturally, at the foremost of our minds, but often ignored as one of the best tools to align our tax code with taxpayers’ ability to contribute to and help build thriving communities.

North Carolina’s adoption of a flat income tax rate – after years of having a graduated income tax rate – has made our tax code more upside down, asking less of those with the highest income. A graduated income tax applies a higher rate on every dollar of income above certain thresholds, while a flat rate delivers a bigger tax cut to the state’s wealthiest taxpayers.

The reduction in the share of their income paid in state and local taxes—through this change as well as others since 2013—means fewer dollars for investments in the pathways that connect people to opportunity such as quality early childhood, K-12 education, and affordable post-secondary education. It also means that middle- and low-income taxpayers continue to pay nearly 10 percent of their income annually in state and local taxes, nearly two times as what is paid by the top 1 percent with average income is $1 million.

This upside down approach to raising the revenue needed for public schools, health, and well-being is also unlikely to perform over time. Without a tax code that aligns with where income growth is happening – concentrated at the top – over time the dollars available for public investments will fall short of what is needed.

 

Load More Related Articles
Load More By Rob Schofield
Load More In Commentary

Top Stories from NCPW

  • News
  • Commentary

Low salaries for public school teachers continue to hurt recruitment North Carolina should return to paying… [...]

WASHINGTON — Over the course of the next year, lawmakers on the U.S. House and Senate… [...]

Duke Health physicians gathered Tuesday in an online round-table discussion of how new abortion restrictions -… [...]

WASHINGTON — President Joe Biden signed his party’s signature climate, health care and tax package into… [...]

As the global pandemic has reminded us with tragic ferocity in recent years, viruses can, despite… [...]

The post Back(stab) the Blue appeared first on NC Policy Watch. [...]

Schools do not need more resource officers, armed guards or for that matter armed teachers. Schools… [...]

Into the sewer. That appears to be the intended destination of what look like torn-up presidential… [...]

REPUBLISHING TERMS

You may republish this article online or in print under our Creative Commons license. You may not edit or shorten the text, you must attribute the article to The Pulse and you must include the author’s name in your republication.

If you have any questions, please email [email protected]

License

Creative Commons License AttributionCreative Commons Attribution
This simple graph sums up NC’s “tax the poor, feed the rich” tax system