Opinion

Opinion

INSTITUTE ON TAXATION AND ECONOMIC POLICY: Impact of tax bills on N.C. residents' federal taxes

Posted November 18, 2017 5:00 a.m. EST
Updated July 13, 2018 2:06 p.m. EDT

Tax reform is still months away, if not longer. But the so-called Big Six group of Republican negotiators from the House, Senate and Trump administration issued a statement Thursday, July 27, 2017 outlining the most general principles they have agreed to.

Editor's note: The Institute on Taxation and Economic Policy, with offices in Washington D.C, and Durham, has analyzed the impact of the tax change proposals on North Carolina taxpayers. A full report with the state-by-state impact of the House plan is here. A report with the state-by-state impact of the Senate proposals is here.


The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In North Carolina, 50 percent of the federal tax cuts would go to the richest 5 percent of residents, and 13 percent of households would face a tax increase, once the bill is fully implemented.

Nationwide, more than a quarter of the total cuts would go to the richest one percent and half would go to the richest five percent. When measured as a share of income, the tax cuts for the richest five percent of Americans are more generous than the tax cuts for other income groups.

The middle fifth of income earners in America, households that are literally America’s middle-class, would get just about a tenth of the tax cuts. In other words, the middle 20 percent of households would receive just a fraction of the benefits going to the richest 1 percent of households.

According to the Joint Committee on Taxation, the official revenue estimator for Congress, the plan would reduce revenue overall by nearly $1.5 trillion over a decade.

HOUSE & SENATE BILLS COMPARED:
The richest 1% of N.C. Taxpayers Get Largest Share of Tax Cuts

TAX CHART-1

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HOUSE & SENATE BILLS COMPARED:
Avg. tax cuts to top 1% of N.C. taxpayers dwarf those to other income groups

Average tax cuts to top 1% of N.C. Taxpayers Dwarf

TAX CHART-4


RICHEST 5% OF N.C. TAXPAYERS GET LARGEST CUTS IN SENATE BILL

TAX CHART-5


HOUSE & SENATE BILLS COMPARED:
Share of low-and-middle-income N.C. taxpayers seeing a tax hike

TAX CHART-6

TAX CHART-7


HOUSE & SENATE BILLS COMPARED:
Impact of plans in 2018-19 in N.C.

TAX CHART-8


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TAX CHART-9


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HOUSE & SENATE BILLS COMPARED:
Impact of plans in 2027

TAX CHART-10


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TAX CHART-11


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