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by WILL FOLKS
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Last year, South Carolina’s ruling “Republican” supermajority rolled out a much-ballyhooed proposal to reduce the Palmetto State’s punitively high top marginal income tax rate from 6.5% to 4.99%.
The problem? Thanks to its various bait-and-switch provisions, this so-called “tax cut” was actually a tax hike on a whopping 59.4% of filers – while another 21.2% of South Carolina taxpayers would have seen no change in their annual compulsory investment in results-challenged governance.
Naturally, we pilloried this abomination… and blasted the GOP establishment for being, well, morons.
With partisan primary elections looming, “Republican” leaders have gone back to the drawing board – putting forward an amended version of the tax cut bill (H. 4216) that did little to address the core concerns with the original legislation.
Our friends at Palmetto State Watch have blasted this version as a “blue collar tax hike” and an example of “reverse Robin Hood,” arguing it unfairly impacts lower income earners.
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“Instead of eliminating the income tax like other states, your legislators want to play king of wealth redistribution and lower income households are the ones who suffer,” Palmetto State Watch founder Alaina Moore wrote. “If lawmakers wanted to genuinely reduce the taxpayer’s burden, they would eliminate the burden…of taxation. It’s that simple. There are countless ways state funding could (and should) be trimmed.”
That’s true… “Republican” lawmakers have funded all manner of political pork, corporate welfare subsidies and unnecessary, inefficient and duplicative bureaucracy. And they’ve done so for years. Meanwhile, these faux conservatives have maintained the highest marginal income tax rate in the entire southeast – at a time when other states were aggressively cutting taxes.
Does the amended version of their latest bait-and-switch bill actually cut taxes, though?
According to a detailed fiscal impact statement (.pdf) released last month by the S.C. Revenue and Fiscal Affairs (SCRFA) office, the legislation would trim a meager $119.1 million in collections during the coming fiscal year – which runs from July 1, 2026 through June 30, 2027. Given lawmakers are projected to spend at least $40 billion during that same time period, we are talking about a tax cut amounting to less than one-third of one percent of the state’s operating budget.
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A total of 34.6% of taxpayers (more than a third) would see no change in their liability, while more than a quarter of them (26.7%) would see a $269.6 million tax hike. That’s 61.3% of South Carolina taxpayers – nearly two-thirds of the Palmetto State’s tax-paying population – which would see their obligation to the state either increase or remain unchanged.
And this is supposed to be a tax cut?
Astoundingly, 64 members of the S.C. House of Representatives – establishment Republicans and a handful of Democrats – voted in favor of this tinkering around the edges. Thankfully, a handful of fiscally conservative GOP members joined most Democrats in voting against it.
Here is that roll call…
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Only 38.7% of taxpayers would see a decline in their overall burden, totaling an estimated $388.7 million. The average decrease? A measly $365 – with most middle income earners (those making between $50,000 and $150,000 annually) would see “relief” ranging from $200 to $363. Significant chunks of middle income earners would see their taxes increase, though, including 38.4% of those earning between $100,000 and $150,000 annually (who would pay an average of $333 more in taxes annually).
Meanwhile, 85.1% of taxpayers earning between $150,000 and $200,000 annually would pay an average of $472 more in taxes each year.
We’ve attached the full SCRFA spreadsheet below, and if you want to go even deeper Palmetto State Watch has an interactive calculator on its website to let people know how exactly how their individual tax returns would be impacted.
Bottom line? Like the original version of this legislation, the amended “Republican” tax bill is a bait-and-switch – an attempt by GOP lawmakers to take credit for cutting taxes while doing the bare minimum to actually cut them.
Senators should either reject this bill – or amend it in such a way that 100% of tax filers receive substantive relief from South Carolina’s oppressively high tax rates, as opposed to a third of them getting a pittance back from the state.
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THE SPREADSHEET…
(S.C. Revenue and Fiscal Affairs Office)
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ABOUT THE AUTHOR…
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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1 comment
I guess Will did not get the memo, cutting taxes for the top 1% while increasing them for these rest of us is what Republicans do.