The Legislature, on Thursday, passed legislation to put a proposed constitutional amendment to the voters in November to lower the current state income tax cap from 10 percent to 7 percent.
The current income tax rate is 5.49 percent, and will drop to 5.25 percent next year.
The original proposal was to lower the tax rate cap to 5 percent but seemingly cold feet in the House saw the proposal increased to 7 percent toward the end of the process.
Senate Leader Phil Berger (R-Rockingham) issued a statement following the proposed amendment’s passage in the Senate.
“North Carolina had some of the highest taxes in the Southeast when Democrats controlled the legislature. Legislative Republicans have substantially reduced the tax burden and put more money back into the pockets of hard-working families and businesses. With this amendment, voters can say no to a return to the days of spendthrift politicians, high taxes and multi-billion dollar deficits by placing this protection in our state constitution.”
Berger also said, in debates, that the a lower cap would be better, but was unattainable this session.
“It would be better if we could cap the income tax at 5.5 percent,” he said. “I think that would be real progress. But I also think moving the maximum income tax rate from 10 percent to 7 percent is progress, just not as much. That is as far as the House would go.”
The proposed amendment will need to garner the support of a majority of the voters in November’s mid-term elections to be codified in the state constitution.
“This puts on the ballot for all voters the chance to decide on a constitutional rate cap that would safeguard substantial tax relief and protect taxpayers from harmful rate increases,” Rep. Jason Saine (R-Lincoln), chairman of the House Finance Committee, said.”
Other groups advocated for lower income tax caps including Americans for Prosperity-North Carolina (AFP-NC) and the Civitas Institute.
AFP-NC State Director Chris McCoy, issued a statement last month on behalf of a coalition calling for the cap saying, “Americans for Prosperity-North Carolina is proud to join our esteemed partners in our continued effort to urge lawmakers in Raleigh to support lowering the cap in the state constitution from 10% to 5.5%. By joining with national and state organizations, AFP-NC can amplify the voices of citizens around the state even further. This letter reinforces that North Carolinians want to power to vote to protect themselves from future tax increases.”
Civitas President Donald Bryson supported the move from 10 percent to 7 percent but agreed with Berger that any reduction is better than the current cap but he was hoping for more, and holds on to that hope for future movement.
“Once the voters see that the sky has not fallen like the progressive education establishment said it would then perhaps we can revisit this issue again at a later date,” Bryson said.