New Tax Trigger Analysis Highlights Need for a Responsible Budget

Raleigh, NC — New analysis published by the Carolina Leadership Coalition (CLC), a pro-business conservative group, underscores the importance of a fiscally responsible approach to tax reform, aligning with the North Carolina House's position as budget discussions continue.

The analysis, authored by economist and tax reform advocate Jared Walczak, highlights both the success of North Carolina’s Republican-led pro-growth tax cuts and the risks posed by the current revenue trigger structure.

Walczak notes:

"The eventual target, a 2.49% flat-rate individual income tax, would further enhance North Carolina’s tax competitiveness… The triggers adopted in 2023, however, are a poor way to get there."

"[The current triggers] have the potential to implement rate reductions at the wrong time, giving lawmakers an unenviable choice: cancel or reverse a tax cut, or risk an avoidable budget shortfall."

With the state now projected to hit a second revenue trigger in 2028, the findings reinforce the House’s commitment to responsible tax relief that protects North Carolinians while safeguarding the state’s long-term fiscal health.

As House Speaker Destin Hall recently stated in an interview with WRAL:

"Both sides—the House and the Senate—want to continue to cut income taxes in this state. It's not that we want to stop income taxes or freeze those. But we want cuts to continue at the same pace that we've been doing it now for 15 years… The Senate plan would go much quicker than that, and the danger in that is that the state's growth may not keep up with those cuts in a way that we would wind up with deficits."

"North Carolina is a destination state. We've got a great tax policy. We've got a great business environment. That's the reason people are moving here in droves."