North Carolina Reportedly Reaches Budget Deal

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.