North Carolina Senate Passes Taxpayer Protection Act

North Carolina taxpayers are in for a treat. The North Carolina Senate has passed the Taxpayer Protection Act, and if approved by the state House, means that North Carolina residents will have the ability to vote next November on constitutional amendments that would set a cap on state spending and taxes.

According to a Forbes article, the proposed spending limit aims to stop state spending from increasing quicker than the rate of inflation and population growth and has the potential to decrease government pressure to raise taxes in the future.

To put the benefits in perspective, the Tax Foundation provided a calculation tool that demonstrates the effects of limiting government spending to the rate of inflation and population growth. If North Carolina legislators had followed this strategy between the years 1999 and 2009, the state would have looked at saving about $52 billion. That’s a pretty hefty amount in savings, especially since that money could have gone back into taxpayer pockets.

Colorado has had a similar spending cap in place since 1992, known as the Taxpayer Bill of Rights. The law has since saved taxpayers in Colorado billions of dollars. The same could be expected in North Carolina, if the law goes into effect.

As part of the Taxpayer Protection Act, voters will also have a say in whether or not to cap the state’s personal and corporate income taxes at 5 percent by 2020. This would be one of the largest benefits of the legislation, as North Carolina currently has the highest income tax rates in the southeast, with personal income tax rates at 5.75 percent.

Still, this doesn’t mean that what follows for North Carolina tax payers will be sunshine and rainbows. There’s no way to avoid paying taxes, and there are plenty of laws that have their fair share of loopholes, allowing the government to continue collecting exorbitant fees on both personal and business taxes.

The best thing residents can do is seek help with a North Carolina tax lawyer, who can explain what the proposed law entails and how it will affect consumers and business owners. Because there are endless stipulations and regulations as far as any tax doctrine goes, locals can ensure their rights are upheld by soliciting the legal expertise of a tax attorney.

Furthermore, taxpayers can seek legal advice on a number of other tax matters, such as back taxes, employment taxes, wages and garnishments. Having a legal professional on your side is always better than facing the government – and the IRS – alone.