RALEIGH — North Carolina state Treasurer Dale Folwell says N.C. voters’ decision to pass a constitutional amendment to lower the cap on income tax will be good for the state’s economy.
“It provides the businesses, and individuals who decide where businesses go, with some certainty in the tax outlook,” said Folwell in an interview on WPTF radio.
The state treasurer considers himself the “keeper of the public purse” and says the state government’s financial outlook is promising and a 7 percent cap in income tax allows N.C. to keep low interest rates when borrowing for key spending priorities like schools and roads. Reducing the cap from 10 to 7 percent means the state will likely keep its AAA bond rating, but even at 7 percent, the cap is much higher than current tax rates.
“Our corporate income tax rate is going to be 2.5 percent next year, so that means the corporate tax would have to triple in order to hit its head on the ceiling,” said Folwell. “The personal income tax would have to go up 38 percent in order to hit its head on the ceiling.”
Lowering the income tax cap was one of four constitutional amendments that N.C. voters passed in the November elections. The others were a requirement to show a photo ID when voting, a right to hunt and fish, and protections for crime victims. The state legislature will convene Nov. 27 to, among other things, determine details of implementing the voter ID amendment.