Historic week in Columbia.
South Carolina Attorney General Alan Wilson and Lt. Gov. Pamela Evette were the top two vote getters in the GOP gubernatorial primary held this past Tuesday. With neither candidate receiving more than 50 percent of the vote, Wilson and Evette advance to a runoff on June 23. Only those who voted in the June 9 primary will be allowed to vote in the runoff.
The great news for South Carolina taxpayers is that both candidates advancing to the GOP gubernatorial primary runoff have signed the Taxpayer Protection Pledge. As a result, Palmetto State taxpayers can rest assured knowing that the winner of the June 23 runoff, who will likely be the next governor, has made a written commitment to veto any legislation that would result in a net tax hike.
While Attorney General Wilson was the first one in this race to sign the Taxpayer Protection Pledge, he and Lt. Gov. Evette have both made elimination of the state income tax a featured proposal upon which they are campaigning. Fortunately for Wilson and Evette, Speaker Murrell Smith, Senate President Thomas Alexander, and their colleagues passed income tax reform this year that sets the next governor up for success when it comes to phasing out the state income tax.
H. 4216, the income tax reform bill enacted this spring, will move South Carolina from a progressive income tax code with a top rate of 6.0 percent, the highest in the southeast, to a flat 1.99 percent. The lowest flat rate in the country currently is Arizona’s 2.5 percent income tax, which South Carolina will best in five years thanks to the enactment of H. 4216.
After South Carolina’s income tax falls to 1.99 percent, H. 4216 will also fully phase out the state income tax over time if revenue triggers continue to be met. However, H. 4216’s long time horizon for full phase out is something that the next governor will likely seek to expedite.
Tuesday’s primary result wasn’t the only good news for South Carolinians this week. On June 10, the day after the primary, the conference committee for the Small Business Regulatory Freedom Act (H. 3021) advanced a final version of the bill that will make South Carolina the 15th state with a state-level REINS Act subjecting costly regulations to legislative approval.
The Senate-passed version of H. 3021 set $10M over five years as the cost threshold above which new regulations would be subject to legislative review, while the House-passed version set that threshold at $1M over five years. The compromise version of H. 3021 that the conference committee agreed to this week goes with the House version’s lower cost threshold, something ATR and other conservative organizations had been urging. H. 3021 will get a final floor vote later this summer when lawmakers return to Columbia to tend to the budget matters and other unfinished business.
