If an income tax rate falls in North Carolina, does anyone hear it?
Apparently not, according to a blog post from the Carolina Partnership for Reform, a nonprofit that touts the achievements of the Republican-led General Assembly.
The group recently posted some “very good facts on tax cuts that North Carolinians will enjoy as a result of the latest legislative actions passed in 2021.” One of the “very good facts” is that those earning the state’s median income of $50,653 will save $131 in taxes in 2022.
But the Carolina Partnership for Reform is worried that North Carolinians are not celebrating the GOP’s generosity in giving median earners this year what amounts to less than $3 a week in income tax savings.
Low-tax advocates have noticed. The group cites a blog post from the Tax Foundation hailing North Carolina’s tax cuts, which will reduce individual income tax rates nearly by half between 2013 and 2027.
Here the Carolina Partnership for Reform – a virtual mouthpiece for the legislature’s Republican leadership – makes a remarkable statement:
“This is amazing progress. And NC taxpayers should be celebrating and joyfully cheering the good news. But the problem is NC taxpayers don’t know their good fortune! They don’t know their taxes have dropped drastically!”
The group cites polls that ask North Carolinians if they are aware the tax rates have dropped and bemoans that, “The answer is always ‘gone up.’ Not even ‘stayed the same.’ ”
That appears to be an accurate assessment. David McLennan, who directs Meredith College’s Meredith Poll, said in an email that he has not polled specifically on state tax cuts, but, “When I have polled more generally about taxes, a majority of people think taxes are too high, about 40 percent think they are OK, and 10 percent think they are too low. I suspect that the organization’s claim is correct. North Carolinians have a much more general understanding of taxing and spending than our political leaders imagine.”
This lack of popular acclaim for Republican tax cuts, the Carolina Partnership for Reform said, is the fault of the media for not telling people their tax rates have gone down often enough. The group urges its followers to “forward this blog post all around to your friends, co-workers and family and tell them how their taxes have dropped in the last decade.”
But there may be a better explanation for why most North Carolinians aren’t aware of the tax cuts. That’s because the largest share of the reductions have gone to corporations and the state’s top 20 percent of earners. Meanwhile, taxpayers have seen the sales tax applied to online sales and more services, fees and fines have increased and urban counties have increased property taxes to make up for inadequate state funding for schools and services.
State Sen. Dan Blue, D-Wake, the Senate’s minority leader, said it’s not a mystery why most people are not celebrating modest savings in their personal income taxes. “They are aware that they are spending more than they are getting back in supposed tax breaks,” he said.
Blue said most people would prefer that their tax dollars be well spent than reflexively cut to serve a low-tax philosophy. “People are willing to invest in a quality education system because they see the results of that much more than they see the benefit of getting $131 dollars,” he said.
So here we are. After a decade of relentless tax cutting, North Carolina has lost billions of dollars in tax revenue, public schools are struggling, state services are lacking and the people who were supposedly clamoring for income tax relief don’t even notice it because they’re paying more in sales taxes, fees and local taxes.
The legislature’s Republican leadership is free to take a bow, but most North Carolinians are holding their applause.