ALEC Policy Champions Advance Constitutional Income Tax Rate Cap in North Carolina
This legislation aligns directly with the ALEC Principles of Taxation and longstanding nonpartisan research on tax competitiveness in all 50 states.
ALEC is proud to recognize Senate President Pro Tempore Phil Berger, Sen. Bill Rabon, Sen. Michael Lee, and Sen. Benton Sawrey as ALEC Policy Champions for their leadership advancing Senate Bill 1080 in North Carolina, which will place a measure on the November ballot to lower the state’s constitutional income tax rate cap from 7% to 3.5%.
The ballot measure is a referendum for an amendment to the North Carolina Constitution. If passed, it will amend Article V, Section 2(6) to reduce the state income tax rate ceiling from 7% to 3.5%. This will prevent future legislative leaders from easily raising income tax rates on hardworking North Carolinians.
This legislation aligns directly with the ALEC Principles of Taxation and longstanding nonpartisan research on tax competitiveness in all 50 states. For 19 years, ALEC has published Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, which identifies personal income tax rates as one of the most consequential levers state policymakers can control in the race for business, capital, and workers. North Carolina has climbed up the ranks since its 21st place ranking in the first edition of Rich States, Poor States. The state now sits in 4th place. Principled leadership and policy choices have placed the state on a trajectory of increased competitiveness, economic opportunity, and entrepreneurship.
In 2011, North Carolina imposed a 6.9% corporate income tax, the highest in the region, and a progressive personal income tax with a top rate of 7.75%. Pro-growth reform began in 2013, when the estate tax was repealed. In 2014, a flat personal income tax took over from the progressive system. Income tax rates have continually been lowered in the years since, and in 2021, legislation was enacted that will eliminate the corporate income tax entirely by 2030.
Congratulations to Senate President Pro Tempore Berger, Sen, Lee, Sen. Sawrey, and Sen. Barnes for taking a historic step towards a more competitive North Carolina — one where workers can keep more of what they earn.