Table 1: Net Increase (Decrease) in Tax Burden for Residents Under an Income Tax
Taxable Value
5,000
15,000
25,000
Adjusted Gross Income 35,000 45,000 55,000 65,000 75,000 85,000 95,000 100,000
$138 $338 0 $38 $238 $438 $638 $538 20,000 ($131 ) ($31) $69 $169 $469 $269 $369 40,000 . ($300) ($200) ($100) $0 $100 $300 $200 50,000 ($384) ($284) ($184) ($84) $16 $216 $116 60,000 ($269) ($469) ($369) ($169) ($69) $31 $131 70,000 ($553) ($453) ($353) ($253) ($153) $47 ($53) 80,000 ($638) ($538) ($438) ($338) ($238) ($138) ($38) 90,000 ($722) ($622) ($522) ($422) ($322) ($222) ($122) 100,000 ($807) ($707) ($607) ($507) ($407) ($307) ($207) 120,000 ($975) ($875) ($775) ($675) ($575) ($475) ($375) 150,000 ($1,229) ($1,129) ($1,029) ($929) ($829) ($729) ($629) 200,000 ($1,651 ) ($1,551 ) ($1,451 ) ($1,351) ($1,251 ) ($1,151) ($1,051)
$738 $569 $400 $316 $231 $147 $62 ($22) ($107)
$838 $938 $669 $769 $500 $600 $416 $516 $331 $431 $247 $347 $162 $262 $78 $178 ($7) $93 ($275) ($175) ($75) ($529) ($429) ($329) ($951) ($851) ($751)
$988 $819 $650 $566 $481 $397 $312 $228 $143 ($25) ($279) ($701)
Effect of Higher Exemption Levels •
Should the City desire to adopt a personal exemption level higher than the $600 minimum established by the Uniform City Income Tax Act, it would realize less income tax revenue and be required to levy a somewhat higher millage rate (see Table 2)
Table 2' Impact of Higher Exemption Levels Current Personal Exemption Level Property Tax $1,500 $600 $1,000 Income Tax Revenue $0 $2,453,703 $2,633,032 $2,553,512 City Millage Required 15.9500 7.5046 7.7684 8.0994 Resident Tax Burden 53.5% 52.5% 52.4% 52.2% Corporate Tax Burden 46.5% 21.8% 22.6% 23.7%
Additional Considerations •
Full implementation and revenue realization of a city income tax would require several years as the City educates employers and residents of the new tax and establishes administrative procedures for tax administration and compliance
•
The City may benefit from establishing withholding agreements with some ofthe larger employers located outside of the City who are not required by UCITA to withhold
Comparison with Prior Income Tax Studies in Mt. Pleasant •
Overall, findings are similar to those reported in the 1990 income tax study, although the current study reveals a more positive outcome for residents of the City, as illustrated in Table 3