North Carolina

Beginning with your North Carolina 2009 tax return, your overall top rates may increase based on a surtax.  This is an increase to the top tier rates if your taxable income is more than $100,000.  Its what we otherwise call a “TAX INCREASE” for North Carolina sources of income.  Just another reason to prepare with good tax planning.

For example, if your filing status is “married filing jointly” and your North Carolina taxable income shown on Line 13 of Form D-400 is $150,000, you would compute your “regular” state income tax on Line 14 and then multiply that amount by 2 percent.  The result would be added to your “regular” tax on Line 14 to give you your total tax liability. Then you subtract credits, withholding, payments, etc., to find out if you are due a refund or if you have to pay any additional tax.

Note:  there is no penalty (interest) for underpayment of estimated tax if the underpayment is because of the surtax.

For further information, please see the North Carolina Department of Revenue site.

There was an excellent piece in the Wall Street Journal’s Opinion section today about Joe Biden’s recent gaffe when he said that the threshold in which taxpayers would get a tax cut was now $150,000. The entire campaign, Obama and Biden have been saying that anyone making under $250,000 would get a tax cut. Now for some reason, this has changed. Now the campaign is defending Biden’s remarks saying that these taxpayers would not be paying more taxes than they are not, but would not get a cut. What happened to the tax cut they have been parading? Nothing happened to it. It was and still is a farse for most of the middle class – even those earning less than $150,000.

Obama has proposed over $900 billion in new spending. I have not heard anyone refer to this in reletive terms, but the current proposed 2009 budget that President Bush submitted to congress was $3.1 trillion. Basically, Obamas new spending will increase the size of the Federal Government by 29%. That is a remarkable increase. I find it odd that people are upset that Bush let the budget grow the way he did, yet they are so strongly supporting growing it another 29%. The government is already way bigger than it should be and the budget is already way out of control. We need to decrease spending – not turbo-charge it.

Back to the taxes. How is Obama going to pay for this mammouth spending increase? Taxes, of course. Unfortunately, the rich are not rich enough. If you recall, Bill Clinton promised a middle-class tax cut in 1992, only to issue the largest tax increase in American history directly on that same middle-class in 1993.

The Wall Street Journal piece points out the following:

“We suspect what’s going on here is more than Mr. Biden’s normal gift of gaffe. As with his admission that a President Obama would quickly be tested by our enemies, the Delaware rambler was stumbling into the truth. An Obama Administration couldn’t possibly pay for a tax cut for 95% of Americans by raising taxes on a mere 5%. Those 5% don’t make enough money, or at least they won’t after they find ways to shelter more of their income when their tax rates rise.”

So, back to my original question that is the title to this post, “Did Biden Let the Truth Slip on the Tax Cut Threshold?” Most likely not. His statement was closer to the truth than what will likely happen, but it is still way higher than what will likely happen. Also, listen closely as they speak of Income Tax, but not of all of the other taxes we are likely to get his with and those we pay indirectly through our employers.