State Income Tax Limit Analysis

The passing of a state income tax limit takes several different factors into discussion. The consequences of passing a state income tax need to be carefully deliberated before considering adoption. Many major actors in state politics affect the process of adopting an income tax limit as well. The state legislature has an important role in creating the tax and expenditure limit, while the state governor is able to use several different methods to veto or block the limit that the legislature suggests. However, when a state decides to change the constitution a legislative referendum must be conducted among state voter’s, in order, for the limit to be finally adopted. Thus, the different benefits, consequences, and actors in the political process
6). This means that North Carolina voters must vote on the adoption of the TEL. During this process, several political actors will try to influence voters, in order, for the referendum to go their way. For example, since Governor Cooper attempted to veto the TEL, he plays an important role in the campaign against amending the state constitution. As the governor, Roy Cooper is the chief policy maker of North Carolina. This means that Cooper has the responsibility to adopt the best policies for the state and develop and adjust policies that are weaker (DMS Chapter 8). Thus, Roy Cooper is able to use the informal powers of the governor to be able to affect the public opinion of the tax and expenditure limit (Clark lecture Mar. 8). Using the mass media, such as newspapers and news stations, that a state governor has access to, Roy Cooper is able to directly sway voters to vote against the tax and expenditure limit through interviews and television appearances. Cooper is able to become an opinion leader as his public stance against the tax and limit expenditure allows voters to rally around what a powerful public figure believes. However, certain interest groups that support the passing of the TEL will try to influence the voters’ decisions as well. Specific interest groups
However, the limit would also place a large local reliance on the state for state aid and state expenditure on local infrastructure, such as highways and education. In order for the state to compensate for the loss of tax revenue from income tax, North Carolina must increase sales taxes in proportion to the increased wages that citizens are keeping to spend. This, consequently, would allow for the state to keep the steady state expenditure revenue steady. I believe that North Carolina must increase other regressive taxes in the state in order to maintain the current level of state expenditure. If North Carolina does not do this, then the state would not have enough funds to maintain the local institutions, such as schools and hospitals, which provide the basic functions of life for citizens. This was the case in Proposition 13 of California. When compared to Propaganda 13, which was passed by California in the 1970s, the effect that the personal income limit will have on North Carolina will not be as extreme. The major effect of Propaganda 13 was to limit the property tax that citizens must pay over the past 20 years. However, the money that citizens saved from this was lost to the government, as the money could have been used to rapidly buildup the local bureaucracies throughout the state. The education of California also took a hit