N.C. Democrats propose 7% tax on income above $1M

Summary

North Carolina Democrats proposed a 7% tax on income above $1 million to raise nearly $1 billion a year for public schools.

Why this matters

The proposal outlines one way lawmakers say the state could increase school funding for pay, facilities, and other K-12 needs. It also highlights the political divide over taxes and education spending in North Carolina.

Democratic lawmakers in North Carolina proposed a 7% marginal income tax on annual income above $1 million, a measure they said could raise nearly $1 billion a year for public schools.

House Bill 1073 would apply only to income exceeding $1 million. Revenue would go to teacher pay, school repairs, construction, and other K-12 needs.

At a Monday morning press conference in Raleigh, Rep. Allen Buansi, D-Orange, said North Carolina’s national rankings for teacher pay and per-student funding show a need for more school investment.

North Carolina is the only state where teacher pay is expected to drop this year, according to the latest National Education Association report. The 2026 report ranked the state 46th in average teacher pay, down three spots from last year, and 46th in per-student funding.

Buansi called the bill a “targeted, straightforward way to strengthen” public schools.

“This is not about broad tax increases,” Buansi said. “It is a targeted adjustment that reflects the reality that those who have benefited the most in our economy can and should contribute more to sustaining it.”

Lawmakers also had not passed a full state budget, leaving teacher pay largely unchanged as costs rise.

 

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