The first North Carolina state constitution was written just a day after the signing of the Declaration of Independence in 1776. A major revision took place in 1868, after the Civil War, when NC had seceded from the Union and had to agree to some concessions — including ratifying the 14th Amendment — in order to be readmitted. The last major revision came in 1971, an effort to make a more comprehensive document.
Since then more than 20 new amendments have been added, including the ones that give the governor veto power and allow her to run for a second term, establish a state income tax and prohibit same-sex couples from being married.
Now Republicans in the state Senate are asking voters to add another amendment, one capping the state income tax at 5.5 percent.
This same legislature has already lowered income taxes to 5.499 percent — it’s scheduled to drop down from 5.75 percent next year. And we’ve seen the effects of this belt-tightening everywhere, from public schools and universities to highways and environmental protections.
To lock it in, they propose kicking it out to voters in the next election, along with another constitutional amendment allowing all gun owners the right to concealed-carry.
Like the gun stuff, this one is designed to bring out the GOP faithful — who seem to be shaken by the specter of Trump for president — in November. But this one may be even more ill advised.
Nobody likes taxes, but it’s how we pay for stuff. When we kick in less money, we forfeit some of our buying power. Most voters understand this concept.
But sometimes governments — like businesses — need to buy things that cost more than they bring in. When a business owner gets in a predicament like this, he generally starts looking for a loan.
Governments don’t take out loans; they issue bonds, which are a prime investment for people who dally in such things because there is virtually no chance of a government entity defaulting on a bond, whereas with a stock the investor always runs the risk of the company going bust and losing everything.
Governments don’t default because they have the authority to levy taxes — this is why just about every government entity in the United States has a AAA rating: Because when it needs more money it can just tweak the tax rate.
The state Treasurer’s Office has already warned that dropping our tax cap to 5.5 percent — the current constitution already caps it at 10 percent — would threaten our state’s AAA bond rating, meaning that when we do issue bonds like the $2 billion Connect NC Bond which voters passed in March, we get less favorable interest terms and broker fees.
Such subtleties may be lost on casual voters, but a rough equivalent would be a business deciding to place a cap on its profit margin, or a nonprofit placing a limit on the number of grants it will go after.
In other words, it’s a stupid thing to do.
The Senate vote on the bill has been kicked to this Saturday — a rare weekend work day for our elected officials. Let’s hope stupid takes a holiday.