Civitas Institute
The new GOP leadership in North Carolina’s General Assembly will be facing many challenges this upcoming legislative session, the projected $3.2 billion budget gap being foremost among them. Facing that daunting task, along with a still struggling economy, the soon-to-be majority leaders have signaled they don’t think now is the right time to tackle any significant reform of North Carolina’s tax structure.
According to Sen. Phil Berger (R-Rockingham), who will likely become the Senate president pro tempore when state lawmakers convene this January, “I’m not sure reforming the tax system is something that is appropriate at this time, simply because of the unsettled state of the economy. The people of North Carolina elected us, I believe, to get the state’s fiscal house in order.”
Berger is right to table any major tax reforms for the time being. The General Assembly last attempted to address significant tax reform in 2009 as the Democratic leadership unveiled their “21st Century Tax Rate Reduction and Modernization Plan” in the Senate Finance Committee. The tax overhaul didn’t make it into the final budget, but generated much discussion.
The 2009 plan was just the latest in a string of several such tax reform plans to be crafted over the last decade, none of which ended up being adopted. Each reform plan is based on the same underlying concept: broaden the tax base and lower the rates.
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