By George Reed, Retired Executive Director of the NC Council of Churches
The Senate Finance Committee is scheduled to vote tomorrow afternoon on a proposed constitutional amendment which would solidify recent tax cuts by adding them to our state’s most basic document. (Amending the constitution requires 2/3 votes in both Senate and House and then a majority vote at the polls. The governor doesn’t get to sign or veto bills pertaining to constitutional amendments.)
Conservative legislators and Governor McCrory have already done away with the state’s progressive income tax structure, under which the wealthiest taxpayers paid a higher percentage of their incomes as tax. In addition, legislators and governors have lowered the income tax rate from 8.25% for the wealthiest a decade ago to a flat rate of 5.75% for all taxpayers today, and that rate is scheduled to drop to 5.499% next year. This will result in a total revenue loss to the state of more than $2 billion annually. By comparison, the total state budget is currently about $22 billion.
The state constitution already contains a provision limiting the state income tax rate to no more than 10%. SB 817 would drop that cap to 5.5%. That legislators have been able to lower the tax without changing the constitution shows that what they are really after now is tying the hands of future General Assemblies and governors, regardless of changes in the state’s permanent or emergency revenue needs. Such an amendment would lock in today’s low rate, with its biggest benefit for the wealthiest taxpayers. It would also force future state and local governments to look to increased fees, reduced tax deductions (including the one for charitable contributions), and increased sales and property taxes in order to meet their revenue needs.
For more information on why this is such a bad idea, click here to read a Fact Sheet from the Budget and Tax Center of the NC Justice Center.
The NC Council of Churches has long supported a tax system that is equitable and adequate. To read more about why people of faith care, what the Bible has to say, and what our denominations have stated, see From Jerusalem to Jericho: Christian Witness on the Tax-Sustained Road. (Note that this resource was prepared prior to elimination of NC’s progressive tax system, but the Biblical teachings and denominational statements remain relevant.)
Please take time right away to call or email your state senator. Tell him/her that you oppose tying the hands of future legislators and governors to deal with permanent or temporary revenue needs that might arise. If you aren’t sure who your senator is, click here. For contact information, click here, and then click on their names. For other legislative information, including the text of SB 817, go to the General Assembly website.