Gov. Haley was right in saying that our state income tax makes it
tougher to recruit and keep businesses – and jobs. The Tax Foundation
recently ranked South Carolina 36th in Business Tax Climate. Eight of
the Top 10 states have no personal income tax.
The South Carolina FairTax Act (H-3993/S-274) would eliminate our 7%
personal income tax (12th highest in the nation) and 5% corporate
income tax on a revenue neutral basis by removing the myriad
exemptions in our sales tax code. It would keep our state sales tax
rate at 6% and would not impact property taxes.
The legislation has 67 co-sponsors in the House, including Speaker
Bobby Harrell and most members of the Charleston, Berkeley and
Dorchester County Delegations. The identical Senate version has 16
co-sponsors, including Senators Glenn McConnell, Larry Grooms, Mike
Rose, Chip Campsen, Paul Campbell and Ray Cleary.
The key element of the legislation is that it increases take-home pay,
which will propel the consumer spending which drives 70% of our
economy. Under the South Carolina FairTax Act, a family of four with
$55,000 in taxable income would take home $428 more each month.
Economists Art Laffer and Stephen Moore wrote in “Rich States, Poor
States”, an analysis of all state tax policies compiled for the
American Legislative Exchange Council, “It’s clear that income taxes
have a decidedly negative impact on growth – we say with confidence
that eliminating the income tax will improve a state’s economic lot.”
With perpetual double-digit unemployment, the South Carolina economy
needs a pro-growth paradigm shift!
