Why is NC state income tax so f#@&ing high?

[sengsational]

I'm not going to argue with you.

Suffice it to say, NC tax isn't cheap. But it also isn't the worst. Is that good, bad? I don't know. I lived in FL and loved not having income tax. I've lived in IL and see a different set of problems. My Dad's house is 1/2 value of mine in NC and he's paying 2x the tax. Not great for retirees.

The fact is NC is changing things. We have to see how this shakes out.

I pay zero attention to the news, so you'll have to tell me, or I'll find out in January

Since I'm within reach of the tax notebook (now sitting in my office instead of on the tablet), I'll fill in the details of the last NC legislative tax swizzle, assuming married, family of 4, standard deductions:

Net these and the total is what you pay NC tax on for 2011:
+ 2011 Federal Taxable Income
+ 2011 Federal Deduction (standard) = $11,600
- 2013 NC Standard Deduction = -$6,000
+ 2011 Federal Personal Exemption = $4,800

Net these and the total is what you pay NC tax on for 2012:
+ 2012 Federal Taxable Income
+ 2012 Federal Deduction (standard) = $11,900
+ 2012 Federal Exemptions (fam of 4) = $15,200
- 2012 NC Standard Deduction (-$6,000)
- 2012 NC personal exemption (-$10,000)

So in the 2011 case, they add $10,400 to the federal taxable income and hit you with a bill for 7% of that (7.75% if you're a slightly higher roller).

But in the 2012 case, they add $11,100 to the federal taxable income and hit it with their rate. It's not a big difference in this example, but it's the political slight of hand that annoys me; since they didn't change the tax rate tables, they claimed not to have increased taxes.

 

[sengsational]

Yep, our wonderful state legislators in Arizona keep patting themselves on their back for balancing the state budget by using the cut and slash method. They did it by reducing funding to programs (like education) which force the local communities to make up for it by increasing property taxes.

I bet there's a property tax "heat map" out there on the internet machine somewhere. If I were moving, I'd for sure consult it before getting real serious about a specific location.

 

[Koolau]

Yep, our wonderful state legislators in Arizona keep patting themselves on their back for balancing the state budget by using the cut and slash method. They did it by reducing funding to programs (like education) which force the local communities to make up for it by increasing property taxes.

Look on the bright side: There is a school of thought which believes moving taxes closer to the recipient of tax-services (e.g., schools, welfare, and on and on) leads to more efficient use of tax funds. After all, local people know whether their taxes are being well spent. If those taxes went first to Washington or to the State House and THEN came back, it seems like "free" stuff. If you have to pay it as a property tax, you bloody well know what it cost you and you bloody well know when you are being cheated on the local services. (Now, if you want to get upset, get upset that your state taxes didn't go down as local taxes went up.) Naturally, not everyone thinks this is a good idea because YMMV.

 

[modhatter]

Nevada has no state income taxes and low property taxes. Sales tax around 8% But has high utility costs, auto registration and car insurance (moderate
But lousy schools and infrastructure.

 

[harley]

Tanstaafl

 

[scrinch]

My personal effective state income tax rate is 0.5%. (Federal is even better, at -1.2%. Yeah. Negative tax rate!)

I guess that makes you one of the 47%. Climb on up, we'll carry you.

 

[JoeWras]

I pay zero attention to the news, so you'll have to tell me, or I'll find out in January

Since I'm within reach of the tax notebook (now sitting in my office instead of on the tablet), I'll fill in the details of the last NC legislative tax swizzle, assuming married, family of 4, standard deductions:

<table of additions to Federal deleted>

OK Sengsational, we agree big time!

You didn't get the 2014 memo. That's what I'm talking about. What you have above irritates the #$#$@* out of me too. NC basically adds all the inflation factors that the Federal builds in. In effect, tax goes up every year. So I get your point, and this is something that has totally irritated me every year, including the ridiculous "graduated tables" which haven't been adjusted in eons.

That's not what I'm talking about. I'm talking about reform coming for next year which was just signed into law. Details are sparse. We're going to have to see how this works out. I don't feel like reading the law right now.

I do know they moved down the rates, but I have no idea what they did with the tables, or whether they still mess with the Federal yearly adjustments.

Oh, and they have made it clear that Social Security WON'T be taxed.

But the Federal pension thing is fuzzy. Rumor has it it will be taxed. But don't quote me on that. Since I have no pensions, I'm not paying attention.

 

[moonwalker]

Looks like a post that revived this thread was deleted, but I have a suggestion unrelated to the political rhetoric that probably got it removed.

You said that the county or city assessed two properties much higher than what you bought them for. In every place I've lived you can dispute assessments, and that has a much better chance of working after a recent purchase like you've done. Take your purchase records and any other recent comps down to the tax office.

Yes, my post was edited due to a reference to politics. I apologize-- (I don't even know if I'm allowed to talk about the correlation between politics and state taxes, so this may be edited for me. . . LOL) the part about politics was not in any way defaming any party or malicious in any way. I simply said that--okay I'll approach it this way and see if this works--I'm coming from a state that prides itself in being, uh, let's see, a high tax and spend state. And I'm moving to a state that is known for being 'hands off,' in its orientation. Yet the state taxes where I'm moving from, in Hawaii, are astronomically lower than North Carolina's. Part of why I'm moving is that I'm retiring and want to invest in rental real estate. But the way real estate is taxed seems extremely unfair. I bought two properties only to find them valued at 20 and 30 percent more than I paid for them in 2012. They weren't even built in 2012, I had to wait to have them completed. Reason: the project had been shut down since 2007 since no one was buying and prices were so low there were no actual values. The clerk told me that now that the units were complete they used 2008 valuations. Everything was re-appraised in 2008 on the 8 year cycle.
But there were no units there in 2008, I said! How could you establish a value so much higher than what they sold for 4 years later?

Apparently I'm stuck with the bill this year, but I can appeal it next year.

Anyone have any predictions as to whether I'll get the values reduced next year? They only re-value real estate every 8 years, so I'm looking at 2016 before the next go at it.

 

[scrinch]

If you can show 2012 market value through your sales prices, I think you've got a good chance of getting your assessments lowered. It's hard to argue with reality... even for bureaucrats!

 

[soupcxan]

I'm surprised my thread from 9 years ago has been revived.

 

[REWahoo]

Back from the dead - another zombie apocalypse thread...

 

[MichaelB]

Hey! Don't knock zombie apocalypse. It is more likely than an asteroid collision, and also more survivable - but only if you take the proper precautions.

 

[JoeWras]

We're still mad.

 

[Koolau]

Yes, my post was edited due to a reference to politics. I apologize-- (I don't even know if I'm allowed to talk about the correlation between politics and state taxes, so this may be edited for me. . . LOL) the part about politics was not in any way defaming any party or malicious in any way. I simply said that--okay I'll approach it this way and see if this works--I'm coming from a state that prides itself in being, uh, let's see, a high tax and spend state. And I'm moving to a state that is known for being 'hands off,' in its orientation. Yet the state taxes where I'm moving from, in Hawaii, are astronomically lower than North Carolina's. Part of why I'm moving is that I'm retiring and want to invest in rental real estate. But the way real estate is taxed seems extremely unfair. I bought two properties only to find them valued at 20 and 30 percent more than I paid for them in 2012. They weren't even built in 2012, I had to wait to have them completed. Reason: the project had been shut down since 2007 since no one was buying and prices were so low there were no actual values. The clerk told me that now that the units were complete they used 2008 valuations. Everything was re-appraised in 2008 on the 8 year cycle.
But there were no units there in 2008, I said! How could you establish a value so much higher than what they sold for 4 years later?

Apparently I'm stuck with the bill this year, but I can appeal it next year.

Anyone have any predictions as to whether I'll get the values reduced next year? They only re-value real estate every 8 years, so I'm looking at 2016 before the next go at it.

Heh, heh, as one of the living-currently-in-Hawaii club, my only partially tongue-in-cheek suggestion (make that "something to think about") would be to move back to Hawaii and "show 'em" in NC. Actually, one of the few "HUGE" tax breaks in Hawaii IS the property tax. On a (to a first approximation) basis, my $half mil. condo costs HALF the taxes that my "mixed-farming-small-diversified-industry-and-big-State-School" place in the heartland that only cost $150K. AND, it gets better as I progress through age 65 and then 70 (exemptions go up SUBSTANTIALLY). If you hadn't figured it out, Hawaii loves its kupunu (indelicately translated as "old people"). In addition, most Pensions and ALL of SS is exempted from the (admittedly) relatively high state income tax. So, if you can play the "game", your tax bill in Hawaii may actually be relatively small. If you have to w*rk, you are probably going to be nailed on taxes in HI. We have been able to play the game and really lower our tax bite as we have adapted to life in Hawaii. It's all the OTHER stuff (heh, heh, $half million condo, $4.40 gas, $1/oz blueberries, etc. etc.) that one has to slowly adapt to and find alternatives.

Full disclosure: My ultimate back-up if (financially) T$HTF in Hawaii, is to move BACK to that heartland place with the relatively high state taxes.

Just sayin'... so, YMMV.

 

[LazyErik]

I just wanted to post because I've never posted in a nine year old thread before. Somebody should be appointed by the mods to dig up an old relevant thread every week.

 

[JoeWras]

Death and taxes. 9 years is nothing. We'll always have taxes to b*7ch about.

 

[Janet H]

I just wanted to post because I've never posted in a nine year old thread before. Somebody should be appointed by the mods to dig up an old relevant thread every week.

Thanks for volunteering

 

[H2ODude]

As a NC resident who moved here from FL, I am always struck by the heavier tax burden here. However, I will say that when we moved here there was a noticeably better upkeep of the state and local facilities. That's deteriorated here though, have no idea what's become of FL. Will say the insurance costs, car and home, were a big improvement here.

 

[caninelover]

This thread should be revived in another 9 years so we can go through the same moaning and groaning all over again

 

[sengsational]

NC is 17th out of 50 according this: Tax Foundation State and Local Tax Burdens Data

 

[zesty]

There are many states with high income taxes. You're not alone.

HI 8.25
CA 9.3
SC 7.0
DC 9
AK 7
ID 7.8
Iowa 8.98
Maine 8.5
Minn 7.85
Montana 11
New Mex 8.2
Ohio 7.5
Oregon 9

I was going to say that Ohio isn't close to 7.5%, it's currently a max of < 6% if you're above $200k. At my income it's around 4%.

Then I saw the post date