7-a - Report on the Orange County Tax Equity Study

Browse Search

CCM Economics, LLC Orange County Tax Equity Page 8 Table 2. Per Capita Income Distributions Per Capita Income Percent of USA Percent of NC Percent of Chapel Hill Carrboro 20,558 71.06 79.31 36.41 Chapel Hill 56,459 195.16 217.82 100.00 Hillsborough 24,567 84.92 94.78 43.51 Mebane 29,134 100.71 112.40 51.60 Unincorporated 36,196 125.12 139.65 64.11 Orange County 36,380 125.75 140.35 64.44 North Carolina 25,920 89.60 100.00 45.91 USA 28,930 100.00 111.61 51.24 Discussion about the distribution of income within the county is important due to the current structure of the tax code and the way the tax revenues are distributed. Currently, about 61% of Orange County’s population lives within a municipality. This means that citizen will be subjected to a variety of different and interrelated taxes from different taxing jurisdictions. In the United States, all governments (federal, state, and local) collected $5.319 trillion in taxes and spent $6.177 trillion in 2016. This means that all governments collected $16,412 and spent $19,057 on a per capita basis. These taxes are used to pay for a variety of federal, state, and local government services such as national defense, roads, police and fire protection, libraries, highways, office space, paper and pencils, etc. However, not all of the $5.319 trillion in taxes is used to provide goods and services. Some of the tax dollars are used to pay interest on government borrowing at all levels of government. Furthermore, a significant portion of taxes collected are redistributed between people and governments.7 Returning to the example of all government spending, of the $6.177 trillion spent by governments, only $2.6552 trillion was actually spent by the government to purchase goods and services such as national defense, roads, police and fire protection, etc. The remaining amount is transfer payments for programs such as AFDC, social security, unemployment insurance, grants 7 See Appendix A for more clarity. 45