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“Business owners, residents, workers, and taxpayers need bold reforms.”
COLUMBIA, SC – Americans for Prosperity – South Carolina (AFP-SC) today urged state lawmakers to go back to the drawing board with S. 1087, a “deal” to change the state income tax in South Carolina.
AFP-SC State Director Candace Carroll released the following statement:
“We were cautiously optimistic when the Governor and legislators released their respective tax reform plans, but this agreement does not go far enough. Moving to two brackets is a good start. However, the top bracket, even if it were to decrease to 6 percent with the triggers included, would still be the highest in the southeast. The agreement at present moves too slow to lower taxes and would hurt our competitiveness with our neighbors in Georgia, who moved to lower their income tax to 5.49% and gradually decrease the rate to 4.99% over the coming years.
“Instead of a one-time rebate, South Carolinians would benefit more from a much lower top bracket, or one flat rate altogether. By eliminating or reducing tax credits and using ongoing revenue or the revenue surplus, we can afford to fund a true income tax break. A truly bold tax reform plan would also reduce our Corporate Net Income Tax, which is the second highest in our region. Back in February we urged lawmakers to take an even more ambitious approach, but this plan falls short. Business owners, residents, workers, and taxpayers deserve better.”
The deal includes a $1 billion tax rebate, which could be used to provide even deeper reductions in the top bracket – or going to an ideal flat rate. Under this deal, the top bracket will decrease from 7% to 6.5% immediately, and then to 6% over the next five years if certain high economic conditions are met. The bill also keeps the marriage penalty in place. Georgia recently enacted a bill that would consolidate their progressive tax system to one rate at 5.75%. North Carolina’s income tax is 4.99% and will phase down to 3.99% over six years. The Corporate Net Income Tax, which is 2.50% in the Tar Heel State, will gradually fall to zero after 2029.