The North Carolina Senate want voters to adopt an amendment to the state constitution that would limit any future income tax to 5.5 per cent.
The bill to put the proposal on the November ballot was introduced by Sen. William Rabon of Southport and strongly endorsed by Finance Committee Chairman Sen. Robert Rucho of Charlotte.
The movement from income taxes as a leading source of state budget revenue was touted by Rucho and Rabon at the Finance Committee meeting Tuesday. Both argued that the cap will make the state more competitive with Southern states, i.e. Tennessee and Florida. The proponents also argued that in case of emergencies, it is quicker for government to raise money from sales taxes than income tax increases.
Rabon gave a clue as to where future new revenue will be raised if the GOP-sponsored constitutional amendment is approved by voters in the fall elections. He referred to “white collar services” as targets for sales tax assessments—lawyers, accountants, healthcare specialists, financial services etc.
The bill was approved by the Senate Wednesday, June 15, with Democrats opposing the concept. The future of the bill in the House is uncertain.