Missouri voters rejected a bad tax initiative. North Carolina should, too

This November, North Carolina voters will be asked to make a decision that could shape the state's future for decades: whether to lock tax cuts into the state constitution and make it harder for us to raise the revenue North Carolina needs. Just a few weeks ago, Missouri voters were given a remarkably similar choice. On Aug. 4, Missouri's primary ballot included Amendment 5, which would have effectively eliminated the state income tax while allowing lawmakers to make up the difference through higher sales taxes. Anti-tax forces spent over $20 million just to make the same tired economic arguments to sell tax cuts. Missouri voters were not buying it. Amendment 5 lost in every county and received just 17% of the statewide vote. According to the State Revenue Alliance, it was the most lopsided major tax ballot in more than 14 years. That needs to get North Carolina's attention. North Carolina is now being asked to make a version of that same bargain: give the biggest tax benefit to those at the top today, promise that economic growth will make up the difference tomorrow, and walk away, hoping that against all odds it all works out. Two proposed constitutional amendments would put new limits on the state's income tax and local property-tax revenue — the primary sources of funds for education, health care, and safety for our communities. One would lower the maximum income tax rate allowed, while the other would enable state leaders to dictate how quickly local governments can raise revenue via property taxes. These tax measures make a more than decade-long failed experiment more permanent, and they are bad news for North Carolina businesses, families and our future. Low or zero rates on corporate profits offer far less than their proponents suggest. Most small businesses would see little direct benefit from cutting income or property taxes. Meanwhile, corporations with the largest profits operating in multiple states will get an outsized break even as they see little change to their bottom-line — the state corporate income tax is just not a significant share of business costs. Instead, what businesses really need to succeed is what tax revenue pays for: excellent public schools, workforce development, and communities where people can afford to live and work. Take away the resources for those investments, and businesses don't magically become more competitive. In fact, they'd face a state with fewer tools to address the problems that make it harder to hire workers, move goods, attract investment, and draw consumers with money to spend. What's more: Should a maximum income tax rate of 3.5% be set in the state Constitution, North Carolina couldn't raise the tax rate on skyrocketing corporate profits to be in line with our neighbors in Virginia and South Carolina. It is particularly shortsighted at a time when the same politicians who placed these amendments on the ballot are pushing the cost of federal tax cuts (from the 'One Big Beautiful Bill Act') onto city and county governments. It would have the devastating long-term effect of limiting what future lawmakers can do when they are faced with a downturn or natural disaster, public health crisis, or even more new costs from the federal government. As kids go back to public schools across the state, what we are missing in providing for our children's future is clear — more teaching assistants in the classroom, classroom supplies and textbooks, school personnel, and safe, healthy buildings that support learning. A corporate income tax rate in line with our neighbors at 5% would allow North Carolina to reach the national average in teacher pay and cover the cost of 6,200 teaching positions that local governments currently have to cover with their property tax revenues. But that wouldn't be possible if the income tax amendment passes in November, and it's why we must come together to vote against it. We all want our schools to have the funding to keep up with the world's changes and ensure our children have the opportunity to pursue their dreams — and we see the real danger of putting limits on tax policies into the Constitution. The tax cuts we've been given since 2013, without ever asking for them, has caused us to be 50th in the country in per pupil education funding: $2 billion per year below Mississippi, $5 billion per year below Virginia and $8 billion per year below South Carolina. A constitutional change makes the current underfunding of public schools more permanent. Missouri voters just showed that people understand this. North Carolina voters have the same opportunity this fall. North Carolina needs an economy where small businesses can find workers, families can afford to thrive, roads and infrastructure work, and communities have the resources to respond when things go wrong. Missouri voters just rejected the old tax-cut playbook. North Carolina must do the same on Nov. 3. Tom Oxholm is a CPA, retired CFO and Executive Vice President of Wake Stone Corporation of Knightdale, and founder of Education is Everyone's Business, a grassroots organization engaging business leaders in the important work of funding North Carolina's public schools.