Why NC Gov. Josh Stein says the income tax cap on fall ballots is a ‘shell game’
AI-generated summary reviewed by our newsroom.
- Gov. Josh Stein called the proposed 3.5% income tax cap a cynical shell game.
- The proposed constitutional amendment would cap North Carolina income tax at 3.5%.
- Stein said the 3.5% cap would shift revenue burdens to sales taxes and regular consumers.
Hello and welcome to our Under the Dome newsletter focusing on the governor. I’m Capitol bureau chief Dawn Vaughan.
Lawmakers are coming back to Raleigh after a weeklong break, and Democratic Gov. Josh Stein is still waiting, as he has been for about a year, for them to send him a budget bill.
Like grains of sand through an hourglass, legislative budget time passes slowly.
What did move swiftly was a bill putting a constitutional amendment on the ballot to cap the personal income tax rate at 3.5%, which is half of the current cap. Constitutional amendments do not need to go to the governor to become law if they pass with a three-fifths supermajority, which this did.
Stein had some sharp words about it, calling it a “con” and a “cynical shell game” as he talked to reporters on Wednesday about a variety of things during one of his “NC Strong” news conferences.
“It is incredibly imprudent and fiscally irresponsible to set a cap on an income tax at a level that we’ve never even been that low before,” Stein said. The current income tax cap is 7%, set by a constitutional amendment that Republicans put on the ballot in 2018 and voters approved. The actual tax rate is 3.99% and is set to fall to 3.49% next year as part of a yearslong series of tax cuts.
“What that is, is a cynical shell game that will take the burden off of very wealthy people who can afford to pay a little bit more in income tax, and put it on the backs of regular people: Anybody who pays the sales tax or anything. Because in the time of a recession you have two ways to raise revenue. It’s either sales tax or income tax,” he said, going on to call it “millionaire protection.”
North Carolina’s income tax is a flat tax, meaning that millionaires pay the same rate as middle-class earners.
Here’s more of my coverage on Stein and Republican lawmakers’ positions on income and sales taxes:
- Tax cap would force NC to hike other taxes or limit raises, Gov. Josh Stein says
- With high prices in stores and at gas pump, will NC lawmakers offer tax relief?
Stay up to date on #ncpol
Be sure to listen to (or watch on YouTube) our weekly Under the Dome podcast. I host a new episode that posts on Tuesdays. On our latest episode, I was joined by congressional impact reporter Danielle Battaglia and democracy reporter Kyle Ingram. Coming up this week, I’ll be talking with my Charlotte Observer colleague Mary Ramsey about legislative action impacting Mecklenburg County.
Thanks for reading. Reach me at dvaughan@newsobserver.com or the entire politics team at dome@newsobserver.com.
This story was originally published May 31, 2026 at 5:00 AM with the headline "Why NC Gov. Josh Stein says the income tax cap on fall ballots is a ‘shell game’."
