Yesterday the South Carolina House of Representatives passed H. 4216, legislation that will further cut income tax rates, putting the state on the path to a 1.99% flat tax over the next five years. H. 4216, which the South Carolina House passed by a vote of 68-46, will cut the state’s top marginal income tax rate from 6.2% to 5.39% and takes the bottom rate from 3.5% down to 1.99%.
Beyond the initial rate cuts included in H. 4216, the tax plan passed by the South Carolina House this week will continue cutting the top rate for the next five years, at which time the state will have a 1.99% flat income tax. The lowest flat income tax rate in the nation is currently Arizona’s 2.5% rate, which H. 4216 would best once fully phased in.
Not only would H. 4216 give South Carolina, which currently levies the highest income tax rate in the southeast, the nation’s lowest flat income tax, it would put the Palmetto State on track to join the club of no-income-tax states. After South Carolina’s income tax rate reaches a flat 1.99%, H. 4216 continues phasing down the income tax rate until it hits zero.
“I applaud Speaker Murrell Smith, Ways & Means Chairman Bruce Bannister, Representative Brandon Newton, and their colleagues for working hard to get this historic income tax cut through the South Carolina House,” said Grover Norquist, president of Americans for Tax Reform. “H. 4216, if enacted, would have South Carolina go from a tax cut laggard to a national leader. Not only would H. 4216 give South Carolina a lower income tax rate than neighboring Georgia and North Carolina, it would make clear the ultimate goal is to take the income tax rate to zero, giving the Palmetto State a tremendous advantage when competing with all states and other nations for job-creating investment. Senate Finance Commmittee Chairman Harvey Peeler has made clear he thinks further income tax rate reduction is needed. I look forward to working with him and his colleagues to get these pro-growth income tax cuts to Governor Henry McMaster’s desk next year.”
