Family D: $60,000 in Adjusted Gross Income

Family D consists of a husband and wife with two children, ages 8 and 11.  The federal adjusted gross income is $60,000, all from salary.  Family D purchases a double-wide mobile home at a cost of $70,000, purchases school supplies and clothing during the tax-free weekend (amount spent = $500), purchases a service agreement (cost = $500) for a new washer and dryer, and the three family members attend 1 Panthers game (ticket price = $80 each), 4 Hurricanes games (ticket price = $55 each), 1 concert (ticket price = $60 each), and 4 movies (ticket price = $6 each).  The family files a joint return and uses the standard deduction.  Charitable contributions amount to $2,000.

2013 2015
Federal adjusted gross Income 60,000 60,000
Deduction for Contribution to saving fund for college (529 plan) 5,000 0
Deduction for small business income 0 0
North Carolina adjusted gross income 55,000 60,000
Standard Deduction 6,000 15,000
N.C. personal exemption allowances 12,500 0
N. C. taxable income 36,500 45,000
N.C. income tax 2,344 2,588
Consumer use tax 16 30
Income Tax due 2,360 2,618
Credit for children (100 per child) 200 200
Credit for child and dependent care expenses (6000 x .07) 420 0
N.C. earned income tax credit 0 0
Credit for charitable contributions for non-itemizers 56 0
Net income tax due 1,684 2,418
Sales taxes
– Service agreement for washer and dryer 0 40.5
– School supplies, clothing during tax free weekend 0 54
– Double wide mobile home 300 3325
– Tickets for 1 Panthers game 0 21.6
– Tickets for 4 Hurricanes games 0 59.4
– Tickets for 1 concert 0 16.2
– Tickets for 4 movies 0 6.48
Total Taxes 1,984 5,941.18

 

Thus, Family D will see a large increase in its total taxes.  Is it fair that hard-working North Carolinians purchasing a mobile home as their primary residence would have to pay significantly more in taxes so that high-income families like A and B enjoy lower tax bills?

Family E

Return to Tax Calculation Comparison