Budget deal tweaks failed tax cut policies, keeping NC revenue on same unsustainable path

Personal income tax rates in NC, 2013-2036, under previous law and under the final budget

Under previous law, after 2026, the personal income tax rate will be lowered based on revenue triggers. This chart follows the consensus revenue forecast, anticipating that the rate will drop to 3.49% in 2027 and 2.99% in 2028. Because revenue forecast data is not available after 2028, it is uncertain for how long the rate would remain at 2.99% before dropping to 2.49%. Under the final 2026-2027 budget, after 2034, two triggers are added to drop the rate to 2.74% and then 2.49%. In the absence of further detail on the revenue thresholds that trigger those reductions, this chart assumes the triggers are hit in 2035 and 2036.
Chart: NC Budget & Tax CenterGet the data Download imageCreated with Datawrapper