Family I: $25,000 in Adjusted Gross Income
Family I consists of a single parent with two children, ages 4 and 6. The federal adjusted gross income is $25,000, all from salary. Family I purchases school supplies and clothing during the tax-free weekend (amount spent = $300), and the three family members attend 1 concert (ticket price = $60 each), 3 movies (ticket price = $6 each), and one circus performance (ticket price = $30 each). The family files a head of household return and uses the standard deduction. Charitable contributions amount to $700.
| 2013 | 2015 | |
|---|---|---|
| Federal adjusted gross Income | 25,000 | 25,000 |
| Deduction for Contribution to saving fund for college (529 plan) | 0 | 0 |
| Deduction for small business income | 0 | 0 |
| North Carolina adjusted gross income | 25,000 | 25,000 |
| Standard deduction | 4,400 | 12,000 |
| N.C. personal exemption allowances | 7,500 | 0 |
| N. C. taxable income | 13,100 | 13,000 |
| N.C. income tax | 785 | 748 |
| Consumer use tax | 9 | 8 |
| Income Tax due | 794 | 756 |
| Credit for children ($100 per child in 2013 and $125 per child in 2014 at this income level) | 200 | 250 |
| Credit for child and dependent care expenses (2000 x .115) | 230 | 0 |
| N.C. earned income tax credit | 170.73 | 0 |
| Credit for charitable contributions for non-itemizers | 21 | 0 |
| Net income tax due | 172 | 506 |
| Sales taxes | ||
| – School supplies, clothing during tax free weekend | 0 | 20.25 |
| – Tickets for 1 concert | 0 | 12.15 |
| – Tickets for 3 movies | 0 | 3.65 |
| – Tickets for 1 circus performance | 0 | 6.08 |
| Total Taxes | 172 | 548.13 |
Thus, Family I will see a large increase in its total taxes; taxes more than tripled.
The elimination of the earned income credit and the elimination of the credit for child and dependent care expenses force many low income families to pay more in taxes. They are losers in the so-called “tax reform”; it is really the “McCrory Middle Income Tax Hike.”
Voting 2016 