The Left’s drumbeat against North Carolina’s proposed constitutional amendment to lower the state’s constitutional income tax rate from 10 percent to 7 percent continues. Sadly enough, they keep pounding out the same tune featuring completely misleading talking points.
The latest comes from the far-left NC Policy Watch, the media arm of the NC Justice Center, which characterizes the tax cap reduction as “shortsighted and fiscally irresponsible.” As humorous as it is to see the group that believes no level of government spending will ever satisfy pretend to care about fiscal responsibility, their toxic agenda is no laughing matter.
Once again, Policy Watch trots out the “a lower income tax rate cap will tie the hands of budget writers in a fiscal emergency” trope. Here quoting an article by the leftists at the Center on Budget and Policy Priorities:
While the ballot measure wouldn’t immediately change the state’s tax code, it would leave future policymakers in a bind. The income tax is North Carolina’s primary revenue source, so if they wanted to improve the state’s beleaguered school systems, help more people get medical care when they need it, or make other investments that residents and businesses demand, they might not be able to.
But let’s think about what they are really saying here. The personal income tax rate as of 2019 will be 5.25 percent. They are arguing that a cap of 10 percent is low enough, going any lower would be too binding. A tax hike from 5.25 percent to 10 percent would represent a 90 percent increase in your taxes. This is the kind of option they want remaining on the table. Conversely, a 7 percent cap would still allow a 33 percent tax hike, which could generate about $4 billion in revenue. Add to that the ability to triple the corporate tax to 7 percent as well, which combined could generate about $5.5 billion in additional revenue – this is what they consider to be too “binding.”
Its also quite hypocritical to warn that such a “restrictive” income tax cap would force legislators to raise the state’s sales tax to raise more revenue, when liberal legislators relied most heavily on sales tax hikes during emergencies at the current income tax rate cap when they were in charge. Indeed, it was former governor Bev Purdue and the very same leftists who are now warning about the dangers of having to raise the sales tax during a downturn who were cheerleading the extension of three-quarters of the “painless penny” in 2011 – a sales tax hike that would have cost taxpayers close to $800 million a year.
Make no mistake, this is not to endorse raising of any taxes during a fiscal crisis (or at any other time), but rather to point out how absurd the arguments are being made by tax cap opponents. Their arguments help shed light on their insatiable desire to tax and spend their way to complete social control.