State budget director Art Pope (whose family foundation is Civitas’ primary benefactor) penned an article in the N&O discussing the benefits of last year’s tax reform legislation. The article highlights how the tax reform enables North Carolinians to keep more of their hard-earned money. Some highlights:
Tax reform began in 2011, when the General Assembly reduced the state sales tax rate by 17 percent, from a state rate of 5.75 percent to 4.75 percent. Tax reform continued in 2013, when McCrory and the legislature simplified the personal income tax – taking rates ranging from 6 percent to 7.75 percent to a single flat rate of 5.8 percent. They also passed a higher standard deduction starting in 2014 and a flat personal income tax rate of 5.75 percent in 2015.
As a result of lower personal income tax rates, a higher standard deduction and more accurate payroll withholding tables, most employees will see on average a 20 percent reduction in state taxes withheld from their paychecks. A large sample of over 75,000 state employees in all income ranges saw the average state tax withheld drop from 5.6 percent in 2013 to 4.5 percent in February and January. This is the equivalent to a 1.1 percent more in take-home pay.
Look at your own paycheck. You’ll discover that the state is withholding fewer taxes, so your take home pay is higher. More importantly, there are tens of thousands of more North Carolinians earning paychecks today than there were in January 2013 when McCrory and his administration took office.