COLUMBIA, SC – State Senator Katrina Shealy (R-Lexington) pre-filed a bill this week that would eliminate the state income tax.
Unlike other states who have replaced the state income tax with a higher sales tax, Shealy’s pre-filed bill would phase out the income tax over a seven year period without burdening South Carolina residents with an increase in other taxes. The bill reduces the income tax rates 1.4 percent each year until the income tax is eliminated entirely for all tax brackets.
According to Senate Majority Leader’s Research Director, this bill would allow South Carolinians to keep nearly $560 million in its first year. And, at the suggestion of DOR, the bill adjusts the way to calculate the amount of income tax owed to make it easier for the taxpayers and more accurate for the state to check.
After pre-filing the bill, Shealy said:
“When I was elected, I made a commitment to the people of South Carolina that I would work to eliminate the state income tax, make government smaller and more efficient, and help all South Carolinians keep more of their hard-earned money. This bill has the potential to accomplish all of these things.
“This bill can help ease the burdens South Carolina families may be facing in these tough times. This bill could allow small business owners in South Carolina to keep more of their hard-earned income and, in turn, give them a greater opportunity to reinvest in their businesses and hire more employees. And, this bill can make South Carolina a more desired place to relocate and start businesses. Doing this will grow our state’s economy and bring more revenue to our state.
“States with no income tax are booming economically and are tops in the nation with the right statistics. We cannot wait any longer to improve South Carolina and be at the top of the national rankings. We must take bold steps to help our residents and lead the nation; this bill is one of those bold steps.”