The lead editorial in Raleigh’s News & Observer puts it simply, plainly and accurately this morning: the state Senate’s new scheme to cap state income taxes — a plan the folks at Progress NC rightfully have labeled the “Millionaire Protection Act” — is a horrible idea. Here’s the N&O:
“State Senate Republicans are rather like kids perched on a garage rooftop, sheets tied around their necks, ready to jump off and fly. Mom warns them. Dad warns then. The astronaut down the street warns them.
On the way to the hospital, they blame Mom, Dad and the astronaut for not stopping them.
Sen. Bob Rucho, Senate Finance Committee chairman, is up on the rooftop and willing to tell his fellow senators, apparently, that the wind’s up and he’s ready. This week, in the wake of a fanciful and potentially disastrous proposal on income taxes, Rucho refused to allow a representative from the State Treasurer’s Office even to speak to his committee.
The idea, another instance of amateur hour at the General Assembly, comes from Republicans and would put to voters a constitutional amendment limiting the state income tax to 5.5 percent. On the surface, and that’s unfortunately the way too many voters would look at it, it sounds appealing, and Republicans cynically know that.
But State Treasurer Janet Cowell in a memo sought to get legislators to face some truths: Limiting the ability of lawmakers in the future to raise taxes above the limit would hamstring the state’s ability to cope with a crisis. What if there were a severe recession? A natural disaster? A need for investment in public education? A crisis with the state’s transportation system? Cowell’s office notes also that the state’s prized AAA credit rating, which allows it to borrow money at lower interest rates, could well be put at risk.
This is a horrible idea, and it’s been proven so. GOP lawmakers simply blow off the problems the state of Colorado has had since engaging in this foolishness. The state got in crisis, and voters had to suspend the tax cap for five years.
The cap would most help the wealthiest North Carolinians, no surprise since GOP lawmakers have been catering to the wealthy and to big business since they got into office. But it could be catastrophic for average North Carolinians.
Say there’s a limit. Then, say there’s a crisis that demands the state raise many millions in revenue. A couple of things would happen under a Republican legislature. One, public education and social programs would be cut; two, sales taxes, which hit the middle class and lower income people hardest, would be raised dramatically.
It’s a leap North Carolina shouldn’t take.”