Income-tax cuts and changes approved since 2013 by Republicans in the N.C. General Assembly will mean an estimated 230,000 fewer people will be paying North Carolina income taxes in 2019, according to a legislative fiscal analysis memo released Tuesday.
House Speaker Tim Moore’s office released the memo, which it requested from the legislature’s nonpartisan Fiscal Research Division after this year’s budget included another round of tax cuts.
Starting in 2019, the state’s personal income tax rate will drop from 5.499 percent to 5.25 percent. The budget will also raise the standard deduction – the amount on which people pay no income taxes unless they itemize – to $20,000 for married couples filing jointly from $17,500.
Democrats have opposed the cuts, saying they will benefit the wealthy and will make it harder for the state to fund key services.
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“Of the nearly 4 million tax returns anticipated for tax year 2019, we estimate the number of returns will decrease an estimated 230,000 when compared with the expected number if the 2012 tax laws were still in effect,” fiscal analysts Barry Boardman and Brian Slivka wrote in the memo. “The increase in these no-tax-liability returns will be due primarily to the increase in the standard deduction from $17,500 in 2018 to $20,000 in 2019.”