5. Protecting the Citizenry from Over-Taxation
Question as it will appear on the ballot:
Constitutional amendment to reduce the income tax rate in North Carolina to a maximum allowable rate of seven percent (7%).
[ ] For [ ] Against
North Carolina’s tax rate, both personal and corporate, is capped at 10%. The proposed amendment would reduce the income tax cap from 10% to 7%. The amendment would not reduce current taxes. The current individual income tax rate is 5.499%, while the corporate income tax rate is 3%. The amendment only limits how much the state income tax rate may increase. North Carolina’s individual income tax rate has gone up as high as 8.25%.
Opponents of this amendment contend that it would tactically deprive the state of billions of dollars that might be needed for public services such as education, health, transportation, infrastructure, etc. When there is something like a recession, state revenues are typically less. When this happens lawmakers should have the option to increase state tax rates to generate needed additional revenues. If raising taxes is not an option, this can create pressures to cut spending on core public services. Without the option of raising taxes in times of emergency, new taxes and fees would likely be imposed on budgets of city and county governments to supply satisfactory revenues. It could also precipitate borrowing by state and local governments and thereby put the State’s triple A bond rating at risk.
Proponents argue this amendment will help protect citizens from a repeat of the tax and spend days which were characteristic of previous legislatures. The higher tax rates of those days produced a sluggish economy in the state and hampered growth. Previous state budgets were marked by huge deficits. Smart fiscal policies in recent years that have restrained state spending and provided significant savings have now placed the state in the position to take advantage of this opportunity. In 2019 the income tax rate will dip to 5.25% and the corporate tax rate to 2.5%. Raising personal and corporate income taxes is a less predictable and reliable means for generating revenues during a recession. Should the state be struck by a recession or emergency, the $2 billion currently set aside in the “Rainy Day Fund” ought to significantly reduce the need for additional funding sources. Protecting the state’s Triple A Bond rating is best preserved by fiscally responsible budgeting, and not raising income taxes.
Christian Action League Position:
Taxes are inevitable. Jesus commanded to “Render unto Caesar, what is Caesar’s” (Mt. 22:17-21). The apostle Paul instructs, “Pay to all what is owed…taxes to whom taxes are owed, revenue to whom revenue is owed…” (Rom. 13:7-8). Nevertheless, the Bible is also hostile to high taxes – to over taxation. High taxes are indicative of a culture’s rebellion against God (example: I Sam. 8:10-18). The Bible offers no direction on taxation rates, except that it should be lower than 10%. If it is as high as 10%, then it is equal to the tithe which God commands of his people. If God commands no more than 10% of his people, then what right does the state have to require more than God himself? The state thus claims equivalence with God.
North Carolina should bring its tax rate to below 10%, which is what this amendment does.
Much could also be said about the numerous areas where government has wrongly interjected itself. The Word of God only authorizes the state “to bear the sword and protect the innocent from evildoers” (Rom. 13:1-7) – to tax to protect and preserve the God-given right of citizens to their life, liberty, and property. But Progressives are too willing to use government coercion to plunder the pockets of the citizenry or the state treasury to provide public services where private enterprise, charity, and the church could do a better job. Even when such policies are well-intended, they are not according to knowledge (Hosea 4:6) and overtime do more harm than good to the economy and the population for whom those services were meant.
Although this amendment was not necessarily crafted with these principals in mind, providence has provided this golden opportunity to bring our state government closer to the model on taxation seen in the Bible. It will not only work to protect and preserve the state’s prospects for prosperity, but it would make the state better situated for the blessings that God longs to give.
Therefore, the Christian Action League supports this amendment.