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INSTITUTE ON TAXATION AND ECONOMIC POLICY: Impact of tax bills on N.C. residents’ federal taxes

November 18, 2017

Editor’s note: The Institute on Taxation and Economic Policy, with offices in Washington D.C, and Durham, has analyzed the impact of the tax change proposals on North Carolina taxpayers. A full report with the state-by-state impact of the House plan is here. A report with the state-by-state impact of the Senate proposals is here.

The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In North Carolina, 50 percent of the federal tax cuts would go to the richest 5 percent of residents, and 13 percent of households would face a tax increase, once the bill is fully implemented.

Nationwide, more than a quarter of the total cuts would go to the richest one percent and half would go to the richest five percent. When measured as a share of income, the tax cuts for the richest five percent of Americans are more generous than the tax cuts for other income groups.

The middle fifth of income earners in America, households that are literally America’s middle-class, would get just about a tenth of the tax cuts. In other words, the middle 20 percent of households would receive just a fraction of the benefits going to the richest 1 percent of households.

According to the Joint Committee on Taxation, the official revenue estimator for Congress, the plan would reduce revenue overall by nearly $1.5 trillion over a decade.

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