SCPC celebrates historic tax relief and reform
Historic tax relief passed by the state Legislature and supported by Governor McMaster will immediately help South Carolina “up its game” when it comes to job creation and business recruitment, according to the South Carolina Policy Council, which strongly advocated for the measure.
The package passed by lawmakers permanently lowers the state income tax and uses one billion dollars in surplus funds to give one-time rebates to taxpayers.
The initial tax cut lowers the top personal income tax rate from 7% to 6.5% for 2022 and greatly simplifies the tax structure by consolidating the lower bracket to just 3%. The top rate will continue to drop over the next several years until it reaches 6%. Taxpayers will receive a one-time rebate ranging from $100 to around $800, based on previous taxes paid.
“South Carolina lawmakers on both sides of the aisle have taken a bold step with this historic tax relief and reform effort,” said SCPC Executive Director Dallas Woodhouse. “As many have acknowledged, South Carolina is in a competitive region for business, with all of our neighbors having lower or no state income taxes. There’s still work to be done, but lawmakers delivered for citizens of the Palmetto State at a time when tax relief is greatly needed.”
Tax reform has long been a goal for the Policy Council, an issue that has grown in importance as neighboring states have moved to greatly reduce their state income taxes. As such, permanently reducing the state income tax was a top priority for SCPC heading into the 2022 legislative session.
In our latest poll of likely state voters, nearly 4 in 5 respondents (78%) said cutting the income tax is important for South Carolina to remain competitive for doing business.
Meanwhile, the passage of next year’s budget shows that our state is capable of lowering taxes while making sure to invest in critical areas like education, roads, elections and state workers.
Lawmakers also gave first passage to a constitutional amendment, which requires voter approval, that would increase the percentage of funds set aside in our state reserve accounts, offering more protection against tax hikes to pay for government services during an economic crisis. SCPC will be supporting the ballot measure come this November.