Tax Day has passed and North Carolina Republicans must be relieved. Maybe now everyone will quit complaining about paying more state taxes this year. But maybe not.
The GOP passed their massive tax reform promising that everybody would get a tax break. They based their claim on a reduction of the tiered income tax rate to a flat rate of 5.8%. The big winners, though, were the high earners who saw their rate drop almost 2% for income over $60,000.
The rest of the state didn’t see much change and a whole lot of people thought they paid more. Some did. About 390,000 small business people paid taxes on $50,000 of income that had been exempted since 2011. Seniors, in particular, felt the pain of losing the medical exemption. Other people had less deducted from their pay checks so they either got a smaller refund or had to pay additional money by April 15. Whether those people actually paid more or not, they felt like they got the shaft.
As WRAL’s Laura Leslie pointed out on her Facebook page, taxpayers need to “compare your 2014 W-2 box 16 to 2013, plus your refunds or debts” to determine whether or not you paid more. She did that and found that, in fact, she owed the state $3 each April but in 2014 had $140 less deducted from her pay check, meaning she got a nominal tax break this year.
So Laura saw her paycheck increase about $11 a month or $5.50 every paycheck if she gets paid twice a month. It’s not really enough to notice and certainly not enough to make a difference in her lifestyle.
And that pretty much sums up the GOP tax reform. Some people, the wealthiest among us, got a huge tax cut. Some people, mostly small business owners and seniors, saw their taxes go up substantially. Most people, like Laura, didn’t see a substantial change in the amount they paid.
But a lot thought they did. And, in politics, that’s what matters. The GOP promised, loudly and repeatedly, that they were going to put more money into people’s pockets. They led people to believe that they would see enough change in their tax bills to improve their lives. For the vast majority of North Carolinians, that didn’t happen.
A lot of voters tolerated the cuts to services and education because they expected to benefit from lower taxes after the Great Recession left their incomes and savings depleted. Instead, they just found out they got nothing. That’s called mismanaging expectations. And next year, if Democrats are worth their salt, Republicans will pay a price for it and Pat McCrory, without the protection of a gerrymandered district, will take the brunt of it.