Hawkins' analysis provided context for voters considering the potential impact of the proposed amendment on household finances and state-funded services.
鶹Ƶ Assistant Teaching Professor of Economics Devon Hawkins provided insight for an Oct. 30 examining a proposed constitutional amendment that would cap North Carolina’s state income tax rate at 3.5%.
The report explores the potential financial implications of the amendment, which voters will decide on Nov. 3. While the state’s current income tax rate is 3.99% and is scheduled to decrease to 3.49% in 2027, the amendment would prevent future lawmakers from raising the rate above 3.5%.
“Essentially, we’re not going to feel much of anything with this decrease in cap,” said Hawkins.
Hawkins explained that lower income tax rates could provide modest increases in take-home pay for residents, but could also reduce revenue available for public services.
“Every action has a reaction,” Hawkins said. “In this case, if we’re lowering tax rates, we’re eliminating tax revenue. There is no way around the fact that with less money, less can be done.”