(The Center Square) – Following through on a Tuesday announcement, a trio of North Carolina senators on Wednesday filed Lower Taxes for All NC.
The legislation is to put a constitutional amendment before voters in November to place a 3.5% cap on the maximum income tax rate the state can levy. In 2018, voters approved a drop from 10% to 7%.
“Republican legislators are committed to lowering the tax burden for all North Carolinians,” said Sen. Lisa Barnes, R-Nash. “We have seen the challenges created by past tax-and-spend policies and refuse to let our state go back to that era. This constitutional amendment provides our citizens the opportunity to have a greater say in how the tax rates are set.”
As part of an announcement this week setting the stage for a state budget to finally be enacted more than 300 days late, both chambers agreed to pass a measure for the November ballot giving voters a constitutional amendment choice to place a cap of 3.5%.
Sen. Michael Lee, R-New Hanover, said there was no question the state has one of the strongest, fastest growing economies in the nation. Even CNBC, a relatively left leaning network, for three (2022, 2023, 2025) of the past four years has named North Carolina its No. 1 State for Business.
“The people of North Carolina elected a Republican majority for a litany of reasons, but one of those key reasons is our fiscal responsibility,” said Sen. Benton Sawrey, R-Johnston. “Republicans in the General Assembly have gone to the mat to keep your tax rates in check.”
Conversely, on Monday in the House of Representatives, Democrats introduced Fair Share for Public Schools Act that proposed a 7% income tax bracket for earnings in excess of $1 million.
In the budget plan expected to be finalized next month, the personal income tax schedule triggers are being repealed and a new schedule set. For tax years 2027, 2028 and 2029, the rate will be 3.49%. In 2030, 2031, 2032, the rate will be 3.24%. In 2033 and 2034, it will drop to 2.99%.
At that point, triggers will be put back to take the rate to 2.74% and eventually 2.49%.
In 2010, when Republicans took majorities in both chambers of the General Assembly for the first time in 140 years since Reconstruction, North Carolinians were on an individual income tax system with rates of 6%, 7% and 7.75%, with potential for a surtax on higher earners.
Population in the state has grown roughly 17% since, from about 9.5 million to 11.2 million. Businesses have flocked, in part drawn by the declining corporate tax rate that will eventually be zero.
The seven federal tax brackets are 10%, 12%, 22%, 24%, 32%, 35% and 37%.
