Republicans pitch 3.5% income tax cap as an affordability fix in North Carolina—but Gov. Josh Stein says it won’t put ‘more money in anyone’s pockets’

Republican lawmakers in North Carolina have steadily reduced the state’s income taxes for more than a decade. On Tuesday, voters will decide whether to make it harder for future lawmakers to reverse those cuts as affordability emerges as one of the biggest issues of the midterms.

North Carolina voters are considering a constitutional amendment that would lower the maximum allowable income tax rate from 7% to 3.5%. This would halve the ceiling for what the state government can charge individuals and corporations through income taxes.

But despite the legislation’s name, “Lower Taxes for All NC,” the amendment wouldn’t actually lower state taxes immediately.

North Carolina’s individual income tax rate currently stands at 3.99%. Under legislation that has already passed, it is scheduled to fall to 3.49% in 2027. The rate is set to drop further to 3.24% in 2030 and 2.99% in 2033.

The measure facing voters Tuesday deals with the future. If approved, raising income taxes above 3.5% would require another constitutional amendment, which requires the approval of three-fifths of both chambers of the state legislature and then a majority of voters.

Supporters say the restriction would protect taxpayers from future tax increases, while critics warn it could leave the state with fewer options to raise money for public services during an economic downturn.

The measure is part of how the Republican-dominated state legislature is trying to tackle the rising cost of living, which 48% of registered voters identified as their top issue, according to a Reuters/Ipsos poll from Tuesday. 

Across the country, voters are considering several competing tax initiatives as they grapple with how to address rising costs. Apart from the constitutional referendum to lower the cap on state income tax, North Carolina voters will also vote Tuesday on whether to allow the state legislature to impose a limit on how much local governments can raise property taxes. 

In total, nine income and wealth tax related measures are on the ballot in six states, according........

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