FACT SHEET: Radical Tax Cap Would Put North Carolina in a Permanent Bind

By Alexandra F. Sirota
BTC Director
Updated August 2017

The N.C. General Assembly has proposed a state Constitutional amendment that would seriously limit our state’s ability to meet the needs of its people and respond to crises in the future. Senate Bill 75 seeks to prevent future lawmakers from ever increasing the state income tax rate. Of the 41 states that have an income tax, only Georgia has taken the drastic step of using its constitution in the present day to lock in arbitrarily low tax rates.

This proposal will have severe consequences for North Carolina’s future prosperity and the democratic process.

Proposal Imposes Radical, Permanent Tax Cap

The Constitutional amendment would permanently freeze the state’s top personal income tax rate at 5.5 percent at a high cost to North Carolina’s communities. With the rate already set to fall to 5.25 percent on January 1, 2019 due to legislative action, the cap would cut off a vital source of revenue for the future as the state grows. A two-thirds majority vote of each house in the General Assembly would place the measure in front of North Carolina voters in a statewide referendum in November 2018. If voters approve the measure this year, the amendment would go into effect Jan. 1, 2019. 

Read the rest of the Factsheet here. 

 

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