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Site SearchRaleigh, N.C. — Lawmakers say the proposed income tax surcharge that they have included in this year's budget plan wouldn't affect 87 percent of North Carolina taxpayers, but who would have to pay it?
The extra charge is based on taxable income in North Carolina – the income after all exemptions and deductions are figured in on the annual D-400 tax form. Individuals whose taxable income is less than $60,000 and couples whose taxable income is less than $100,000 wouldn't be affected by the proposed surcharge.
Individuals whose taxable income is between $60,000 and $150,000 and couples whose taxable income is between $100,000 and $250,000 would have to pay a 2 percent surcharge under the plan. Individuals and couples with taxable incomes above $150,000 and $250,000, respectively, would face a 3 percent surcharge.
The surcharge would be calculated on total tax liability, including withholding taxes that have been paid throughout the year and any quarterly estimated tax payments that have been made.
For example, an individual with a taxable income of $70,000 who owes $4,900 in state income taxes would have to pay an extra $98 for the 2 percent surcharge. If the taxpayer had already had more than that withheld from his or her paychecks throughout the year, the surcharge would mean a smaller tax refund.
All businesses would have to pay a 3 percent surcharge on their annual tax liability, regardless of their revenue or profitability.
Lawmakers say the surcharge would raise $210 million toward erasing a projected $4.6 billion deficit. It and a one-cent increase to the sales tax rate that lawmakers have also proposed would end after two years.
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August 5, 2009 12:31 p.m.
And...I laugh at the "temporary" sales tax increase.
August 5, 2009 12:25 p.m.
So do you bring your own pencils and paper to your place of work? How about bringing your own toilet paper while you're so eager to do the same to us state employees?
My dad still lives in TN and while they don't have a state income tax, property taxes are high and every county and town has the authority to impose their own sales tax. Then there's a meals tax on restaurant meals (to get those tourist dollars going to the now-gone Opryland), hotel room tax, etc. Basically they tax everything to avoid starting an income tax.
Meanwhile, the state dumps a lot of programs onto the counties to fund, meaning many of them don't fund anything at all, including road maintenance on local roads. We always knew when we crossed a county line into a poor county; the road surface became full of potholes and dangerously narrow.
August 3, 2009 1:08 p.m.
July 31, 2009 7:50 p.m.
But their sales tax is higher - 7% for the state and up to 2.75% for local. I think the tax on food is only 1% less than that, so that's considerably higher than NC.
Also, while Tennessee doesn't tax earned income, pensions, etc., they do have a tax (6% I think) on stock dividends, bond interest, etc. I'm not sure what the property tax rates are there - they could be higher than here also.
Though it's a lower tax state for some people, there are probably some (perhaps retirees with relatively low income, mostly from dividends/interest, and spending more than they earn) that would pay more there than here.
July 31, 2009 7:32 p.m.