North Carolina House and Senate leaders continue to consider a flawed proposal that would send more than 600 million tax dollars from revenue over projections to some taxpayers.
Analysis from the Fiscal Research Division and the Office of State Budget and Management reveals that the revenue over projections is primarily the result of income from non-withholding sources such as capital gains, business income, and dividends — sources of income that are almost exclusively held by North Carolina’s wealthiest residents.
These additional dollars are not the result of the state collecting more taxes than should have been collected — they are the result of the rich getting richer.
In North Carolina, 66 percent of all capital gains income is held by taxpayers in the top 1 percent; as such, with revenue over projections largely tied to capital gains and dividends, this means that the revenue over projections are largely due to the rich getting richer.
New analysis from the Institute of Taxation and Economic Policy finds that under the proposed Taxpayer Refund Act, the top 20 percent of NC taxpayers would receive 34 percent of the tax refunds, while the bottom 80 percent of NC taxpayers would receive only 66 percent of the tax refunds.
Research from the Economic Policy Institute shows that in North Carolina, the difference in income is growing and the economy is not working well for everyone.
- The top 1 percent make 20.6 times more than the bottom 99 percent.
- The top 1 percent take home 17.2 percent of all the income
- The average income of the top 1 percent is $902,972.
- The average income of the bottom 99 percent is $43,850.
- The share of all income held by the top 1 percent in recent years has approached or surpassed historical highs.