As stated in earlier blog posts by Civitas's Brian Balfour, North Carolina has the highest income tax rate in the Southeast. Why is this the case? Maybe it has something to do with the compensation of our government employees.
According to the Bureau of Economic Analysis, a branch of the federal government, North Carolina compensates its employees at a much higher rate than the average state in the Southeast. One could assume that the cost of living would be more or less equal throughout the Southeast, so why do our government employees receive more than others in the Southeast?
Here, we can see the index for North Carolina's compensation of government employees.
Here is the index for the average compensation of government employees for the Southeast.
If North Carolina reduced the compensation of its employees, perhaps they could reduce the tax burden on the rest of us.