The recent tax changes made by the Republican leaders in the North Carolina legislature have a “reverse Robin Hood” effect: all high income taxpayers will have a decrease in their taxes and many middle income and low income taxpayers will pay more in taxes. The North Carolina tax obligation for nine families, at a variety of income levels, is computed for 2013 (with the old tax laws) and 2015 (with the new tax laws). Income tax changes and sales tax changes are included in the calculations.

  • Family A consists of a husband and wife with three children, ages 12, 15, and 17. The federal adjusted gross income, which is the starting point for the North Carolina tax calculations, is $2,000,000, all from salary.
  • Family B consists of a husband and wife with three children, ages 6, 9, and 11. The federal adjusted gross income is $300,000, all from salary.
  • Family C consists of a husband and wife with one child, age 8. The federal adjusted gross income is $70,000, all from small business income. Family C qualifies for the child tax credit.
  • Family D consists of a husband and wife with two children, ages 8, 11. The federal adjusted gross income is $60,000, all from salary. Family D is purchasing a double-wide mobile home at a cost of $70,000. Family D qualifies for the child tax credit and the credit for child and dependent care expenses.
  • Family E consists of a husband and wife with three children, ages 7, 11, and 12. The federal adjusted gross income is $55,000, all from salary. Family E qualifies for the child tax credit and the credit for child and dependent care expenses.
  • Family F consists of a retired couple, husband age 72, and wife, age 68. The federal adjusted gross income is $52,000, with $29,000 from pensions and $23,000 from social security.
  • Family G consists of a husband and wife with three children, ages 2, 3, and 6. The federal adjusted gross income is $45,000, all from salary. Family G qualifies for the child tax credit, the credit for child and dependent care expenses, and the Earned Income Credit.
  • Family H consists of a single parent with three children, ages 9, 10, and 16. The federal adjusted gross income is $30,000, all from salary. Family H qualifies for the child tax credit, the credit for child and dependent care expenses, and the Earned Income Credit.
  • 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 qualifies for the child tax credit, the credit for child and dependent care expenses, and the Earned Income Credit.


Details about sales tax calculations can be reviewed here.

The calculations will show that the high income families, A and B, will pay less in taxes, while the other families pay more in taxes.  This tax effect is a great disservice to hard working middle and low income families in North Carolina.  It is important that the Republican leaders who enacted this McCrory middle income tax hike be replaced in the November election.

It is the combination of a) the elimination of exemptions, 2) the elimination of several deductions, c) the elimination of several credits, and d) the addition of several sales taxes that will result in many taxpayers paying more in taxes.

See the actual calculations that follow.