The Tax Foundation recently released their 2015 State Business Tax Climate Index and North Carolina makes a huge leap this year.
According to the report, North Carolina leaped from being ranked at no. 44 last year to no. 16 this year. The state tax policies made and implemented last year has decreased an individual’s income taxes from 7.75 percent to 5.8 percent while the corporate taxes were cut from 6.9 percent to 6 percent. This could actually go lower in the future depending on North Carolina’s balance sheet the succeeding years. Aside from this, an individual’s standard tax deduction was also increased.
Forbes claim that the 28-spot leap by North Carolina is the biggest jump in the history of the tax climate index aside from the fact that there were no states this year that moved more than five ranks.
More than 100 variables are utilized by the Tax Foundation to determine the ranking, which includes factors like individual income tax, corporate income tax, sales tax, unemployment insurance tax and property tax. This helps assess how well each state structures their tax systems.
The results don’t conclude that these are the states with the best economies. They’re simply ranking them based on tax rates and complexities.
However, liberal groups have complained about the tax deductions done by the state recently as they claim it to benefit only the wealthy.
According to a report by the Raleigh-based conservative-leaning policy group John Locke Foundation, each household earning between $50,000 to $75,000 would enjoy saving $79 yearly from the tax changes, while individuals earning $200,000 or more would save an average of $2,848.