Tax surcharge a risk for Democrats

RALEIGH (The Raleigh News & Observer) - Many taxpayers may not notice a 1-cent increase in the sales tax. But it will be hard for them to miss another tax increase that may be headed their way: a 2 percent surcharge on everyone's income tax.

House and Senate Democrats, who have a controlling majority in the legislature, have agreed to both taxes this week as part of a $980 million package to cope with the budget deficit facing North Carolina.

That would be coupled with cuts in state spending, but Democratic leaders say the tax increases are needed to avoid more devastating cuts to education and social services.