An Analysis of North Carolina’s Income Tax Changes from 2013 to 2014
According to IRS and Census data, North Carolina gained about $30 billion annually in adjusted gross income (AGI) from 1992 to 2014 due to residents moving in from other states. The majority of North Carolina’s new residents came from New York, followed by New Jersey, Virginia, Pennsylvania and California. During the same time period, however, North Carolina lost wealth from residents moving out of the state. Although North Carolina gained more wealth than it lost overall, its neighbors — South Carolina and Tennessee — were the top gainers from North Carolinians moving into their states. North Carolina’s tax reform has made the state more competitive with its immediate neighbors. Indeed, in some cases, those living in South Carolina would fare better with a move to the North. But even in cases where South Carolina and Tennessee still have an advantage, the tax burden gap has become smaller.