August 3, 2009
North Carolina Reportedly Reaches Budget Deal
by Joseph Henchman
After rejecting spending cuts in favor of finding a way to raise $990 million in new taxes, and then rejecting base broadening in favor of hiking rates on narrow bases, then rejecting that, the powers-that-be in North Carolina have decided to follow the trend of targeting "millionaires" (now defined as those making $60,000 or more):
That plan places a 2 percent surcharge on individuals making more than $60,000 or couples making more than $100,000. And it places a 3 percent surcharge on individuals making more than $150,000 and couples whose taxable income is more than $250,000.
For example, a couple earning $250,000 will have to figure out their current tax liability and then pay 103% of it.
Also included in the budget deal is hiking the state sales tax rate by 1 percentage point.
More reliance on high-income earners means more volatility, meaning bigger shortfalls down the road.
More on North Carolina here and here.
The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Monthly Archives
Disclaimer: All views expressed on the Tax Foundation’s Tax Policy Blog are those of the individual authors, and do not necessarily represent the views of the Tax Foundation, its Board of Directors, or its financial contributors. The Tax Foundation makes no representation concerning the views expressed, and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented.