In Fiscal Year (FY) 2013, North Carolina collected $35.6 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average North Carolina taxpayer can afford this level of taxation.
As shown in Chart 1 below, North Carolina’s state and local tax burden (tax collections divided by personal income) was the seventeenth lowest in the nation for FY 2013 at 9.4 percent—this is -9 percent below the national average of 10.3 percent. North Carolina’s tax burden has grown over time by 34 percent to 9.4 percent in FY 2013 from 7 percent in FY 1950.
North Carolina’s lower than average state and local tax burden is driven by a low property tax burden (2.4 percent, 39th highest), sales tax burden (2 percent, 31st highest), and all other taxes burden (1.7 percent, 36th highest). However, North Carolina does have a significant individual income tax burden (2.9 percent, 13th highest) that offsets the other lower taxes.
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in North Carolina—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The North Carolina counties with the highest local government tax burden include: Dare County, NC (8.3 percent), Currituck County, NC (4.8 percent), and Avery County, NC (4.7 percent). The North Carolina counties with the lowest local government tax burden include: Greene County, NC (1.4 percent), Caswell County, NC (1.7 percent), and Jones County, NC (1.8 percent).
J. Scott Moody has nearly 20 years experience as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as the American Conservative Union Foundation, Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.