NC's sales tax puts biggest burden on poor, no plans to change

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The $400 million surplus in North Carolina's budget has some legislators talking about adding more tax cuts for the future. Regardless of what happens, there seems to be a plan to shift the source of government revenue from the state income tax to the sales and excise tax, a tax some argue is regressive and puts the most burden on lowest income households.

Others worry about who will pay the sales tax and who will avoid it. Data from the Institute on Taxation and Economic Policy show that the families with the lowest incomes in the state — less than $18,000 per year — pay 5.9 percent of their income in sales tax. The 20 percent with the largest incomes — $80,000 and up — pay only 2.5 to 0.8 percent of what they make in sales tax.

The reason is, as Van Duyn put it, "When you're at the bottom of the income scale, you're being taxed on everything you buy."

From the Citizen-Times


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