(Carolina Journal) North Carolina residents pay nearly 10 percent of their income in taxes, placing the state squarely among the 20th-most taxed in the nation, said the nonprofit Tax Foundation in its most recent Annual State-Local Tax Burden Ranking (PDF download here).
With its ranking at No. 17, North Carolina has the second-highest tax burden per person among Southern states at 9.9 percent, according to the Tax Foundation researchers. At No. 15, Arkansas’ 10.0 percent burden ranks the highest in the South.
The Tar Heel State’s ranking could be unwelcome news on a couple of fronts.
“In general, lower tax burdens are going to be associated with more money in the hands of businesses,” said Scott Drenkard, a Tax Foundation economist. Businesses can do more hiring and increase productivity in a state where the tax burden is not as high.
“We always say at the Tax Foundation that taxes are one of the reasons people move between states, but not the only reason,” said Elizabeth Malm, a Tax Foundation economist and co-author of the research report.
“But I would argue that when making business decisions … the same would go for an individual,” Malm said. People and businesses tend to desire to live in or relocate to a state where the tax climate is more favorable to them.
According to the findings of the foundation’s research, released Tuesday, North Carolina residents have a tax burden of 9.9 percent. They paid $2,648 in taxes per capita to their home state, and $887 to other states, for a total of $3,535. Per capita income is $35,659, or 37th lowest among the states. To arrive at the 9.9 percent tax burden, the tax total is divided by the per capita income.
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