Who Pays SC State Income Tax?

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As South Carolinians across the state prepare for the April 15 tax filing deadline, a Policy Council analysis of the state income tax system finds that more than 30 percent of South Carolinians paid no tax whatsoever in 2007 — the last year for which the Department of Revenue released statistics.

The top 1 percent of state earners, with reported income more than $340,000, paid 24.8 percent of all income taxes. The entire bottom 50 percent of earners paid just 2.2 percent of income taxes.

As citizens earn more they increasingly bear a larger burden of state income taxes. This result is intentional due to the state’s progressive income tax system; however, South Carolina’s tax tables have not been adjusted for inflation in years, which results in the top marginal rate of 7 percent kicking in at the relatively low level of $13,351. This 7 percent rate is effectively the highest in the Southeast since the top bracket applies at lower levels than neighboring states.

Proposals to reduce the state income tax are commonly characterized as tax breaks for the rich at the expense of ordinary South Carolinians, but these supposedly rich citizens are actually comprised of very ordinary state residents.

Two married public school teachers earning the state average salary rank in the top 25 percent of state earners. A plumber and registered nurse each earning $60,000 per year fall in the top 10 percent of state income. These citizens are the real examples of what is discussed when the state identifies its elite earners.

South Carolina Income Tax Quick Facts
  • More than 31 percent of tax filers paid zero state income tax in 2007
  • 67 percent of tax filers paid less than $1,000
  • The top 1 percent of tax filers paid one-quarter of all state income taxes
Who Pays South Carolina State Income Tax?
State Taxable Income State Income Tax Burden
Top 1% (Above $340,000) 24.8%
Top 5% (Above $93,000) 44.6%
Top 10% (Above $64,000) 60%
Top 25% (Above $30,000) 84.9%
Top 50% (Above $8,700) 97.8%
Bottom 50% (Below $8,700) 2.2%
Source: S.C. Dept. of Revenue
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