Letter: 'Tax break' for wealthy? Let's check the numbers
Published 12:00 am Wednesday, January 3, 2007
I read with great amusement the proclamation on the front page of the Dec. 30 edition of the Post: “Tax break for wealthy among new laws.” Nice populist rhetoric, but what are the facts? Who are these “wealthy” and what could this dramatic windfall be?
It seems that an individual with an annual income of $120,000 is “wealthy,” as those above this threshold will see a reduction in their top rate. Thus, someone with an income of say, $150,000, would see his marginal income tax rate on earnings above $120,000 decrease from 8.25 percent to 8 percent. This would produce an annual “tax break for the wealthy” of $75. Perhaps such a “wealthy” person could buy another yacht with such a handsome windfall!
North Carolina exempts the first $12,750 of income from state income taxes. Thus, lower income individuals have a significant portion, if not all, of their income free of state income taxes. I fully support such a tax structure, in that it helps many lower income families in meeting the basic financial necessities of daily life. However, such aspects of the tax code are never highlighted in media publications. It is far too easy to get people worked up about how the “rich” are somehow getting away with an unfair advantage.
I feel it regrettable that the Post refers to a top marginal state income tax rate of 8 percent (exceeded by only six other states in the union) as a “tax break for the wealthy.” Indeed, when added to federal income taxes, gas taxes, sales taxes, property taxes, etc., the North Carolina income tax rates which range from 6 percent to 8 percent are a significant burden for people across the income spectrum.
— Rikki Spencer