Rob Christensen

The truth about income taxes

Probably the most politically incorrect comment a person can make this time of year has nothing to do with a person’s ethnicity, gender or religion.

If you want to earn their ire, tell them their taxes are not too high.

Everybody, of course, thinks they are getting soaked. The Republican-led legislature just passed the biggest tax cut in North Carolina history, and a new poll released last week shows that 60 percent of voters think their taxes have gone up.

No matter what you pay, you think it’s too much – especially around the April 15 tax paying deadline. I firmly believe that if taxes were cut in half, within two years many people would be back to complaining about high taxes.

But high compared with what?

They are not high compared with the rest of the world.

A study by KPMG, the international financial consulting giant, ranked the U.S. 53rd in a study of 93 countries in state and national taxes. That was based on 2012 figures.

Getting worse?

Not only is the U.S. not a high-tax country, but things don’t seem to be getting worse.

Every year, the conservative, Washington-based Tax Foundation announces a Tax Freedom Day – the day you stop working to pay federal, state and local taxes and when you keep the rest of your earnings for yourself.

This year, the group’s Tax Freedom Day is April 24 – 114 days into the year. The last day it fell this early was in 2007 when it occurred on April 25. So it has been eight years since you worked so few days for the government, according to the Tax Foundation.

If you look at just North Carolina, Tax Freedom Day fell even earlier than it did nationally – on April 16, which was the 19th best in the country. By comparison, Tax Freedom Day arrived first in Louisiana and last in New York.

Income tax rates have come down dramatically from the past. In 1981 the income tax rates ranged from 14 percent for the low bracket to 70 percent for the top bracket. Today, they range from 10 percent to 39.6 percent for the top bracket.

According to statistics run by Forbes.com, the site operated by the business magazine, North Carolina is ranked 34th in the country in state and local tax burden, considering all taxes.

Wyoming is No. 1, with the lowest taxes, and New York is 50th, with the highest taxes.

But these numbers are unlikely to satisfy many. This was a country that was established, after all, by people griping about the taxes on stamps and tea.

Christensen: 919-829-4532;

Twitter: @oldpolhack

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