North Carolina’s revenue system funds investments in the public structures—schools, courts, hospitals, colleges, universities, and infrastructure—that are critical to building and preserving a strong middle class and a 21st-century economy. It is important that North Carolina have adequate resources to make these investments—but how that revenue is raised is important, too.
In recent years, North Carolina’s approach to taxation has made our tax code more upside-down, asking more of taxpayers with low and middle incomes and less from the wealthy and large corporations. The state also has far fewer dollars to meet the needs of a growing population and to adapt to a changing economy and respond to natural disasters.
Latest State Tax Policy Updates
At a time when North Carolinians with earned income below $60,000 have yet to see employment return to pre-COVID-19 levels — and while those with higher income have fully recovered and corporate profits are soaring — North Carolina needs to invest in supporting a more just recovery and to target any tax cuts to those hardest hit by the pandemic.
Instead, North Carolina Senate leaders are proposing cutting taxes for profitable corporations and their shareholders, consolidating the income gains of the richest North Carolinians by giving away much-needed dollars in form of tax cuts. They’re doubling down on a march toward austerity that has made us less safe and less resilient in the face of significant public health and economic challenges.
- Choosing tax cuts today blocks NC from a more resilient future
- Richest North Carolinians already pay so little in taxes, Senate tax plan would make it even worse
Fixing our State Tax Code
For North Carolina, a graduated tax structure that taxes higher incomes at higher rates could serve as one tool to raise revenue for priorities in communities across our state to support access to opportunity. In particular, a graduated rate structure that places a top marginal rate on income over $1 million would make revenue available for priorities in communities across the state, like supporting classroom investment, water quality, and monitoring and creating a more affordable post-secondary education system.
Moreover, a millionaire’s tax — and moving to a graduated income tax structure that sets higher rates on higher incomes — can help North Carolina invest to decrease racial inequities, build economic opportunity, and spur growth.