Some millionaires across the country — a self-described group of “traitors to their class” — are starting to ask that they be taxed at a higher rate. They brought that campaign to North Carolina on Monday, where volunteers knocked on doors in Fayetteville and, in Raleigh, Democratic state lawmakers pushed for a bill that faces long odds of passing the Republican-controlled state legislature.
The group Patriotic Millionaires and its supporters made their case for passing House Bill 1073 as a way to inject an estimated $1 billion annually into the state’s public schools by taxing the richest few people in the state.
Other WRAL Top Stories
Under North Carolina’s current tax law, everyone is taxed at a 3.99% rate. This bill, if it becomes law, would nearly double the income tax rate paid by those making more than $1 million per year in income, bringing their tax rate up to 7%.
A 7% tax rate is the highest possible rate in North Carolina, due to a constitutional amendment voters passed in 2018. If the bill were to become law, all of the extra money raised by that new millionaire tax would be sent directly to public schools.
“We are in a crisis,” Rep. Allen Buansi, D-Orange, said Monday at a press conference promoting the bill he sponsored. “We are at a point where the gap between what our schools need, and what the state is providing, is undeniable.”
Monica Lavery, a Raleigh millionaire, said at a press conference Monday that when Republican state lawmakers passed a massive overhaul of the state’s tax laws in 2013 — cutting income taxes while replacing some of the lost income by applying sales taxes to more products and services — it had the end result of effectively raising taxes on the poor to cut taxes for the rich.
“The tax system here in North Carolina is ludicrous,” she said, noting that low-income earners now pay a much higher percentage of their salary in taxes than high-income earners do. She said higher taxes wouldn’t have made a meaningful impact on the financial decisions she and her husband made in recent years.
“Do you think I'm going to stop investing because I have to pay an extra $20,000 or $30,000, or whatever it is, in taxes? No,” Lavery said. “In the end, there's no justifiable reason why a millionaire like me should get a tax break — that I neither need nor really deserve — over my neighbors who work two or three jobs to put food on the table and gas in their trucks.”
The bill wouldn’t raise taxes on all millionaires — plenty of families have assets north of $1 million when taking their homes, investment accounts and other sources of wealth into consideration — but rather just on those whose annual income is over $1 million.
According to supporters, that’s just 0.6% of North Carolinians who would face rising taxes. Yet it would provide an extra $1 billion a year to the state’s coffers, they estimate.
There doesn’t appear to be overwhelming demand among local millionaires to raise their taxes, however.
Of the 200-plus members of the Patriotic Millionaires group, Lavery is the only one who lives in North Carolina. And many of the state’s wealthiest residents have spent years contributing to Republican politicians, as well as to conservative political groups or think tanks, with the goal of getting the tax cuts they now enjoy.
And while North Carolina ranks among the bottom of the nation in school funding, some Republican legislative leaders say they want to do better.
The state budget is now nearly a year past due, in part to disagreements between the state House and Senate. Senate Republicans want a new budget to focus more on tax cuts than on raises for state workers, while House Republicans want less aggressive tax cuts, and bigger raises for teachers among most other state workers.
“We've got a good chance to do that,” House Speaker Destin Hall, R-Caldwell, told reporters last week after thousands of teachers protested in Raleigh, demanding higher pay. “None of that's resolved yet. But that's part of the reason for the budget impasse, is that the House insists on real raises for those folks.”