Tax break? More like Tax broke

Published 8:02 am Tuesday, April 21, 2015

The danger signs were abundant heading into Tax Day 2015.

Facebook lit-up like a Christmas tree in the days leading up to April 15. My friends on that social media outlet were singing the blues on what I later read was the NC GOP’s “new and improved” state income tax law.

Friends were saying after filling out the D-400 form (personal state income tax), they longed for the old days (and the old rates).

Most noticeably absent were a few key deductions that helped lower the number representing the adjusted gross income on the federal 1040 form. That change led my wife and I having to pay additional money to the state for the first time in over 20 years.

I wasn’t a happy camper, and I wasn’t alone.

While standing in line, angrily clutching an envelope containing my state tax form and a check for over 200 bucks, at the Ahoskie Post Office around 12 noon last Wednesday, a conversation broke out about this new tax formula. Of the five engaged in that brief chat, to include yours truly, none were thrilled about having to fork over more money after paying thousands in state taxes all year long. I knew the other four….all, like me, were middle class citizens.

To pour salt into the wound, the very next day (April 16) I received the following email from Claude Pope, chairman of the North Carolina Republican Party.

“Because of tax cuts passed by our Republican legislature and signed by Governor McCrory, more hard-working North Carolinians are able to take home more money in their paychecks this year,” said Pope in the email. “While the liberal policies of the past reflected their belief that government knows how to spend your money best, we recognize that the taxpayers of North Carolina know how to spend their money best — not government. By keeping more money in the pockets of North Carolina families and businesses, we will continue to power the Carolina Comeback and unleash the economic potential of North Carolinians.”

According to info in the email, the tax reform legislation signed into law in 2013 updated North Carolina’s out-of-date tax code from the 1930s and included the largest income tax rate cut in state history. Personal income tax rates were lowered from a tiered system with a top rate of 7.75 percent to a flat rate of 5.75 percent in 2015 — the largest income tax cut in state history. In addition to cutting income tax rates, the standard deduction was increased for all taxpayers, the child tax credit was increased for many families and unfair special interest tax breaks were eliminated.

It further stated that a nonpartisan analysis by the legislature’s Fiscal Research Division showed these tax reforms will cut taxes by close to $2.4 billion in Fiscal Year 2015-16 compared to when Democrats last controlled state government in 2010, including when you account for the elimination of special tax loopholes. The analysis also showed that North Carolina households in every income category received a tax cut.

If you thought I was angry standing in the Post Office line on Wednesday, I had to reach for a couple of my blood pressure pills after reading Pope’s email on Thursday. For the first time in my life, I hit the reply button:

In this press release it states….The analysis also showed that North Carolina households in every income category received a tax cut, my reply began. Personally, if I did receive a “tax cut” then why, pray tell, did I have to write a check for $208 on Wednesday, April 15 and mail it to the NC Dept. of Revenue? This marks the first time in roughly 20 years that I owed the state additional funds. Typically, we come close to breaking even….for 2013 my wife and I received a refund of $68; our combined salary for 2014 was within a few dollars of 2013.

I guess someone (the middle class) has to “cover” the difference between what the upper class paid in taxes during 2013 with the old tiered system compared to the new “one size fits all” system.

To date, I have not received a reply from Mr. Pope….and I’m not holding my breath while waiting.

Cal Bryant is Editor of Roanoke-Chowan Publications. He can be contacted at cal.bryant@r-cnews.com or 252-332-7207.

About Cal Bryant

Cal Bryant, a 40-year veteran of the newspaper industry, serves as the Editor at Roanoke-Chowan Publications, publishers of the Roanoke-Chowan News-Herald, Gates County Index, and Front Porch Living magazine.

email author More by Cal