@NCCapitol

@NCCapitol

2013 tax changes now showing up on NC returns

Posted April 9, 2015

— As people scramble to meet the April 15 deadline for filing tax returns, many in North Carolina are seeing the impact of the state tax overhaul lawmakers passed in 2013.

While Republicans say most taxpayers should end up paying less, Democrats contend most of the break is going to wealthy people and corporations.

"Most people are going to benefit from it," said Sen. Chad Barefoot, R-Wake. "The personal income tax reduction applies to every working person out there that is taxed on their personal income, and they've seen those rates fall substantially."

But Sen. Mike Woodard, D-Durham, said he's heard from people who say their tax bill has gone up this year.

"People feel duped by this governor and the legislature. They were promised the largest tax cut in history. Instead, they're paying more," Woodard said.

The individual income tax rate has changed from a tiered system ranging from 6 to 7.75 percent to a flat 5.8 percent. Under the flat tax, less has been withheld from paychecks since the beginning of last year, so the more someone earns, the more the new structure saves them.

The standard deduction also is at least double what it used to be for all North Carolina taxpayers, so everyone is paying tax on less of their income. Unless, that is, they were eligible for one of the many itemized deductions lawmakers eliminated, such as tax credits for child care and college savings or deductions for medical expenses, retirement income and small-business income. If those deductions would have totaled more than the new standard deduction for a specific household, their state tax bill probably went up.

Democrats say the changes disproportionately hurt low-income people to help the wealthy.

"Gov. (Pat) McCrory and the Republican legislature are costing them dearly, and they deserve to know who was prioritized ahead of them," said Rep. Susan Fisher, D-Buncombe.

Barefoot acknowledges there are winners and losers, but he said the tax changes are good for the state economy, which benefits everyone.

"I think what we need to keep in mind is the big picture, and the big picture is North Carolina’s had one of the fastest economic recoveries in the country, and part of that is due in fact to the changes we made in our tax code," he said. "The purpose was to make North Carolina competitive again with our surrounding states, which we are now, and what we’ve seen since we’ve done that, we’ve seen some of the fastest job growth in the nation."

48 Comments

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  • Terry Watts Apr 13, 2015
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    Is that an admission that our tax burdens have actually been increased???

  • Tom Boswell Apr 13, 2015
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    You need to get a new CPA. We payed a lot less this year than in 2013. According to the Tax Foundations web site our overall state tax burden in one year went from the 6th highest in the country to the 34th highest. They stated in their long history it is the largest difference in one year.

  • Tom Boswell Apr 13, 2015
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    Paying local real estate tax and sales tax does nothing towards paying down our 18 trillion in national debt.

  • Tom Boswell Apr 13, 2015
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    My wife and I lost the $4,000 combined deduction from retirement income but with about the same income from 2013 are paying a lot less tax than in 2013. According to the Tax Foundations web site our overall state tax burden in one year went from the 6th highest in the country to the 34th highest. They stated in their long history it is the largest difference in one year.

  • Quin Satterthwaite Apr 12, 2015
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    Ironic that The Democrats, who love taxing people, are now the ones who are howling.

    Very hypocritical. Except for Al Sharpton, who doesn't believe in paying taxes in the first place.

  • Randy Smith Apr 11, 2015
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    Mine too. We had a $1500 swing to the bad. Ended up owing the State money this year for the first time in my life, and didn't do anything different.........actually making less money than I did in 2011. Don't even talk about the check I need to write to the Feds (that I don't have since my wife has been unemployed since the first of January. She starts her new job in a couple of weeks, but she'll be making at $30K less a year. Next year could be interesting......if we can survive that long.

  • Carl Keehn Apr 11, 2015
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    Increasing credits? For What?

    My taxes went up as I lost the few credits I had. I'm sure that others saw the same.

  • Chris Holder Apr 10, 2015
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    Gotta go for the evening, have a good night, Collin!

  • Chris Holder Apr 10, 2015
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    What does that have to do with the tax code?

  • Collin McLoud Apr 10, 2015
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    What is your definition of "equality"?

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