Business Committee on Financing the Future Update

IEI began its program of work on Financing the Future in 2005, with the goal of offering a model agenda for action in the 2009 legislative session. We are pleased to announce this goal is now coming to fruition.

On Monday, April 14, IEI’s Business Committee on Financing the Future (BCFTF) released its Statement of Principles on tax modernization for North Carolina, the culmination of four years of work on the topic. The BCFTF identified principles that can lower overall tax rates, decrease the state’s dependence on the income tax, and preserve many state and local programs that come from volatile state revenues. This includes broadening the sales tax to include services and some previously exempt goods, while lowering the overall rate.

On the heels of the recommendations, earlier this week the Senate Finance Committee unveiled a comprehensive proposal to overhaul North Carolina’s tax system. If passed, it would lower corporate and personal income tax rates, but expand the income tax base by eliminating exemptions, and also lower sales tax rates on a sales tax base that would be expanded to include many services.

Clearly, many elements of the proposal are consistent with the principles announced by the BCFTF, and are also consistent with other work done by IEI and many others on tax modernization. This proposal is a big first step toward building a secure, 21st century financial system for North Carolina.

If you are interested in this critical issue, visit our tax calculator at www.emergingissues.org, and explore your own ideas for securing North Carolina’s financial future. If you have any questions on IEI's work on tax modernization or the business committee's recommendations, please email us at institute@ncsu.edu. We will continue to keep you updated as this issue progresses.