Orange County NC Website
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2 <br />3 <br />4 <br />5 <br />6 <br />8 <br />9 <br />10 <br />11 <br />12 <br />13 <br />14 <br />15 <br />16 <br />17 <br />18 <br />19 <br />20 <br />21 <br />22 <br />23 <br />24 <br />25 <br />26 <br />27 <br />28 <br />29 <br />30 <br />31 <br />32 <br />33 <br />34 <br />35 <br />36 <br />37 <br />38 <br />39 <br />40 <br />41 <br />42 <br />43 <br />44 <br />45 <br />46 <br />47 <br />48 <br />49 <br />50 <br />M11 <br />David Mitchell made the following PowerPoint presentation: <br />Orange County Tax Equity Study <br />BOCC Meeting <br />January 23, 2018 <br />Hillsborough, NC <br />Outline of Presentation <br />• Information about myself and my firm <br />• Understanding the issue of tax equity <br />• Area of Study— Orange County <br />• Approach to analyzing the issue of tax equity <br />• Results <br />• Questions <br />CCM Economics, LLC <br />• David M. Mitchell, President <br />• Ph.D. in Economics in 2001 <br />• Economic analysis, forecasts, economic impact studies for 17 years <br />• Recent Past Clients: National Park Service; US Census Bureau; State of South <br />Carolina; State of Missouri; Estero, FI; Gainesville, Fl, Cheraw, SC; University of SC; <br />Understanding Tax Equity <br />• Benefits Principle —pay taxes commensurate with the benefits received <br />• Ability -to -pay principle— higher income household can afford to pay more in taxes, so <br />they should <br />• Consider two households, Poor and Rich, with incomes of $25,000 and $150,000 <br />• Local government provides one good, local education, which costs $7,000 per student <br />per year <br />• Benefits principle —both households pay $7,000 in taxes. Poor household pays 28% of <br />their income and rich household pays 4.6% of their income. Is this fair? Both paying <br />and receiving the same dollar value of output, but paying different percentages for it. <br />• Ability to pay principle —poor household pays 5% of their income ($1,250) and rich <br />household pays 10.2% of their income ($12,750). Is this fair? Poor household is <br />receiving an extra $5,750 of value that they didn't pay for ($7,000 - $1,250) and rich <br />household is losing $5,750 that they paid for but didn't get ($12,750 - $7,000) <br />• Consider the US Income Tax <br />• Top 1 % of all income earners earned 20.6% of AGI but paid 39.5% of federal income <br />taxes <br />• Bottom 50% of all income earners earned 11.3% of AGI but paid 2.8% of federal income <br />taxes <br />• The only way to have completely equitable taxes is for every household to earn an <br />identical income and every household to have identical preferences for the consumption <br />of government services <br />Area of Study – Orange County- map <br />Area of Study – Orange County- graph <br />(percent population change 1987 -2015) <br />