North Carolina Budget/Tax Increases

North Carolina Governor Bev Perdue and the Democrat controlled legislature have come to an agreement about the budget for the next fiscal year. Many people will not be happy with the alterations.

The plan will increase the sales tax by 1%, making the new sales tax rate 5.5% in addition to the local rates (which make the effective sales tax and usage rate anywhere from 7.75% to 8.25% depending on the county in which you live).

There will also be an increased tax on alcohol and tobacco products purchased within the State. Any internet purchases made will, for the first time, be subject to these rates. Digital downloads, for things like iTunes, will be included, as well.

The final increase will be to income taxes on those deemed to be wealthier citizens. This means that any individual making $60,000 a year or couples making $100,000 a year will face a 2% surtax. If you make $150,000 a year as an individual or $250,000 as a married couple, the surtax will be 3%. For those that are not aware, a surtax comes off the top of your tax return. This means that it is taken before any deductions, credits, and adjustments. After the surtax is confiscated, you then move forward with the normal process of determining your tax liability for the year.

The bill is accessible at this link: http://www.ncleg.net/sessions/2009/budget/2009/S202-CCSMAxf-3.pdf. The changes to the income and sales taxes begin on page 218.

The part that is the most galling is that the budget next year (after a $4.5 billion shortage this year) will remain the same $20.3 billion dollars that it was this fiscal year. The politicians in power see fit to increase the taxpayer burden for shrinking the gap but do not seem to think that decreasing their superfluous spending is necessary. As a citizen of this State, I find it incomprehensible that our politicians think that $60,000/$100,000 is wealthy. The responsible thing to do (and the choice that average citizens would have to make) is to prioritize spending and focus on core needs while trimming the outputs.