How much people should pay in taxes is a question that often stirs heated debate. That’s a good thing. The essence of democracy is for two sides to make their cases and see what happens.
Well, the days of such democratic participation would be numbered in North Carolina if a measure proposed by State Senate leaders is adopted.
Senate Bill 817 would amend the state constitution to say the state’s income tax rate couldn’t exceed 5.5 percent. It’s such a radical step that only one other state has short-circuited democracy by writing an income tax limit into its constitution.
North Carolina’s tax rate is scheduled to fall to 5.499 percent January 1. So, effectively, the amendment says the tax rate can’t be raised without another constitutional amendment.
At first glance it’s easy to see why this might seem appealing. It seems to guarantee that taxes will never go up. Imagine if you could get that kind of assurance for your child’s future college tuition today or that your retirement savings will continue to grow.
But of course you can’t, and there’s a reason why.
No one knows what the future holds. Usually there are a whole host of ways that costs grow or change.
Whether you think the state income tax today is too high, too low, or just right, there is no way to determine if it will raise the revenue it will take to meet North Carolinians’ needs five years from now, or 10, or 50.
The very thing wrong with this approach is why supporters think their plan is right. They believe – or at least they want the public to believe – that taxes are inherently bad. End of story.
In truth, our economy booms and communities thrive when we have more to invest in schools, health and the public infrastructure that today is deteriorating before our eyes. Our quality of life depends on having enough revenue, especially in times of natural disaster or economic crisis.
Instead, some want to write one more chapter in their ongoing effort to cut North Carolina’s income taxes – a policy that has given the wealthiest households the biggest benefits at the expense of our common good.
A constitutional amendment would lock in the tax cuts that started in 2013 – tax cuts that so far have brought less instructional support and supplies to students in the classroom, less monitoring of air and water quality, and fewer people overseeing children in the child welfare system.
Don’t confuse this latest proposal with reform. More accurately, it provides political cover to lawmakers who prefer tax cuts that largely benefit the well off over public investments that promote broad prosperity. When urged to invest in quality schools, keep college affordable or make sure every North Carolinian has medical care, these lawmakers will be able to complain, “We can’t afford it. Our hands are tied” — after they tied their own hands and those of their successors.
North Carolinians deserve a better destiny than that.
Over the years our legislature has voted to raise taxes and lower them. The public always had a say. We elect our legislators to use their judgment to make North Carolina a stronger, more prosperous state – not to shirk their responsibility and take away from future lawmakers and residents the ability to use their judgment to meet needs as they arise. This proposal would take away the power of the people to hold their elected lawmakers accountable for ensuring that their communities provide a quality of life that makes the Tar Heel State an attractive place to raise a family and operate a business.
Alexander Forter Sirota is the Director of the N.C. Budget & Tax Center.