Many taxpayers may not notice a 1-cent increase in the sales tax. But it will be hard for them to miss another tax increase that may be headed their way: a 2 percent surcharge on everyone's income tax.
House and Senate Democrats, who have a controlling majority in the legislature, have agreed to both taxes this week as part of a $980 million package to cope with the budget deficit facing North Carolina.
That would be coupled with cuts in state spending, but Democratic leaders say the tax increases are needed to avoid more devastating cuts to education and social services.
And that could come back to haunt Democrats. In competitive districts, Democrats are already predicting a difficult campaign season next year, when all 170 House and Senate seats are up for election.
"The package the House wants us to accept is raising everything," said Sen. Joe Sam Queen, a Waynesville Democrat who represents one of the state's few truly competitive legislative districts. Queen has not decided whether he will support the tax plan. But if he votes for it, he said, he can already envision the Republican television and radio commercials chastising him for increasing taxes.
"There will be more acrimony and rhetoric in this coming election than ever before," he said.
Republicans, long in the minority in the legislature, did not hesitate to start the debate.
"They found a way to impose a tax on everybody without consideration for your ability to pay," said Rep. Thom Tillis, a Mecklenburg County Republican. "They even found a way to tax taxes." (N&O)
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its a FEE
Its not a surcharge, its a fee. Just like all of the banking fees. Now the state realizes it can make money off of it. I dont remember getting any extra when they took two months to get me my state income tax refund. Where was my surcharge? This is unbelievable.