RALEIGH – The House Finance Committee Wednesday passed reported favorably on Senate Bill 75, which would offer a choice to voters on whether or not to amend the state constitution to include a cap on state income taxes of 5.5 percent. After the most recent budget passage, the individual state income tax rate is currently at 5.25 percent.
AN ACT TO AMEND THE NORTH CAROLINA CONSTITUTION TO PROVIDE THAT THE MAXIMUM TAX RATE ON INCOMES CANNOT EXCEED FIVE AND ONE-HALF PERCENT.
The legislative movement marks the second on a constitutional amendment this session. An amendment to require Voter ID has seen action in recent days.
Of course, any attempt to inhibit the ability of future Big Government types to raise taxes is sure to draw their ire.
The Left-leaning NC Budget & Tax Center, part the NC Justice Center, wasted no time in complaining about the potential for voters to approve such an amendment.
“This permanent change to the Constitution isn’t needed and won’t guarantee that taxes for everyday North Carolinians won’t go up. As was stated in committee by proponents of the idea, legislators will be able to raise other taxes in the future, including fees and franchise taxes, and get rid of deductions like the mortgage interest deduction and medical expense deduction, just to name a few. Such a permanent move only serves to lock in low tax rates for higher-income people and profitable corporations. Such a permanent move, as has been seen in other states, will put more pressure on local governments to raise property taxes or sales taxes to meet growing needs in their communities.
This permanent change to the Constitution puts at risk our ability to borrow at low costs at a time when we have major infrastructure needs across the state in transportation and education. Moreover, it leaves future lawmakers with fewer tools at a time when federal funding is uncertain and the future could bring new and unexpected needs.”
You can almost feel the animosity these Leftists have for high income earners in and businesses.
While they warn about risks to borrowing money and whine about limiting the State’s ability to spread around people’s hard earned money to select localities, the reality of the last several years of tax cuts paints a very different picture.
Through out the Republican-led tax reforms North Carolina has maintained a AAA credit rating. Democrats warned through out that such a stellar credit rating was at risk due to lowering tax rates.
Furthermore, each time a new round of tax cuts were announced Democrats went running for the nearest microphone or TV camera to fear monger about government insolvency via falling revenues. In reality tax revenues have continued up, spending has been relatively constrained, and large revenue surpluses have become the norm.
The future unexpected needs they refer to are exactly why Republican lawmakers have been steadily building the largest rainy-day fund in the state’s history. Reserves Democrat Governor Roy Cooper wants to use for big spending programs.
What the Left is really afraid of is the very real possibility that Republican majorities cou;d enable voters to tie the hands of future legislatures when it comes to taxes. And that’s exactly how it should be – voters set the parameters for what the government can do.
Actually, judging by recent polling, voters support such a income tax capping amendment by a healthy majority.
SB75 has now been passed on to another House committee, but its momentum shoudl carry it to the House floor before lawmakers adjourn the session.
As such, it looks like voters, especially Republicans, will have plenty of good reasons to head to the polls in November.