Editorial: Lawmakers Need to Focus on Regular Folks
The Greensboro News and Record is out with an editorial calling on lawmakers to focus their efforts on helping "regular folks" in North Carolina, instead of big corporations and the wealthy. The editorial board brings attention to the fact that the tax changes made in 2013 have overwhelmingly benefited the wealthy in NC. From their editorial,
State legislators opened their 2015 session saying they want to ease the tax burden on “regular folks.”
That will be a turnaround. “Regular folks” — those who earn moderate incomes or less — pay a larger share of their incomes in state and local taxes than do the very wealthy in North Carolina.
The Institute on Taxation and Economic Policy issued a 50-state report last week with disturbing news: All across the country, state and local tax policy is skewed in favor of people who already have the most money. North Carolina is about average, but recent changes will make it worse.
Low- and middle-income earners pay about 9 percent of what they make in state and local taxes in North Carolina. Those in the top 1 percent pay about 5 percent.
The state income tax is still slightly progressive. The lowest 20 percent of earners pay less than 1 percent of their incomes. The middle quintile pays an average of 3.3 percent. The top 1 percent pay 4.4 percent.
Recent tax “reform” in North Carolina has lowered and flattened income-tax rates, with the top rate dropping the most. The legislature is shifting more of the tax burden to sales taxes, which are terribly regressive. The lowest earners pay nearly 6 percent of their incomes, on average, in sales and use taxes. The top 1 percent pay less than 1 percent of their incomes.
Some North Carolina policy makers look with envy at Texas and Florida, which have no personal income tax. That’s good for the wealthy, but Texas and Florida have the widest tax disparities in the country: The poor pay a very heavy share of their incomes in taxes, and the very wealthy pay little.