The largest of three proposed tax cuts by South Carolina “Republican” leaders took a major step forward when it unanimously cleared the Senate finance committee on Tuesday.
For years, this committee was a graveyard for tax cuts … but all of that changed last fall when fiscally liberal senate leader Hugh Leatherman passed away.
New chairman Harvey Peeler has made it clear he intends to move the Palmetto State in a different direction … although the bad news is there is a lot of ground that needs to be made up.
Like, a lot.
(Via: FITSNews/ YouTube)
Peeler’s proposal would start the process by slashing the state’s punitively high top marginal income tax rate from seven percent to 5.7 percent – immediately. That cut, which would apply to 2021 income, is significantly deeper than the incremental reduction which passed the S.C. House of Representatives earlier this year. The House measure would cut the top marginal rate to 6.5 percent immediately and then trim another half-percentage point over the next five years.
Given the tax relief passed in South Carolina’s neighboring states – and the massive amount of surplus money at lawmakers’ disposal this year – neither proposal is blowing my skirt up.
Still, Peeler’s allies praised his leadership on the issue …
“Senator Peeler is clearly determined to put his own stamp as Senate finance chairman on our state’s fiscal policy — one with a clear preference for leaving more tax dollars in people’s pockets,” senator Tom Davis told me. “One of the most striking things was the unanimous vote in favor of making tax cuts that were unthinkable in prior years past, which speaks to the respect he has in the Senate and his ability to lead.”
A senior member of the finance committee, Davis has been tapped by Peeler as the floor leader on the tax cut bill (S. 1087).
“He also wants to enact other tax reforms next year, too; nothing is off the table, as he thinks spending is too bloated and our tax code too uncompetitive,” Davis added. “What you’re seeing here is a willingness to engage in macro economic policy with an eye toward making the state more competitive and South Carolinians more prosperous.”
Peeler will need to keep the pedal to the floor if he hopes to achieve those objectives, because his current offering fails to hit the target.
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In previewing Peeler’s proposal last month, I noted that “anything short of an immediate two percentage point reduction in the state’s onerously high top marginal rate is going to be insufficient in light of the massive tax cut North Carolina is currently implementing.”
The need to “go big or go home” is even more pronounced in light of runaway inflation and huge spikes in gasoline prices.
And remember, South Carolina has never been competitive on income levels … which further underscores the need to (at the very least) catch up with what our neighboring states are doing.
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ABOUT THE AUTHOR …
(Via: FITSNews)
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 seven children. Oh, he also has LOTS of hats … but has given them up for Lent this year.
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