Time ripe to eliminate state income tax, senators said

Source: Post and Courier

COLUMBIA — Two state lawmakers believe 2016 is ripe for eliminating South Carolina’s income tax.

A recent study by the National Center for Policy Analysis revealed that income tax reform efforts by North Carolina’s governor and General Assembly have made the state more competitive with South Carolina.

At the same time, South Carolina’s tax revenues have risen as the state’s economy rebounded from the financial crash of 2008. Next fiscal year, the state expects tax revenues will exceed the current year’s by at least $380 million.

That’s one of the many reasons Sens. Larry Grooms, R-Charleston, and Katrina Shealy, R-Lexington, say they’ll be pushing for eliminating the state’s income tax during the upcoming legislative year.

“I think eliminating personal income tax is going to grow our economy,” Shealy said. “We know that we’re collecting too much money every year. Why not let the people have that back?”

With more money in their pockets, consumers will spend more, Shealy said. Both she and Grooms have introduced legislation that eliminates the income tax in the past, but the bills have languished in committees.

In this upcoming legislative session, discussions in the Senate will be centered on a bill that seeks to increase the gas tax. Shealy and Grooms support that as a user-pay fee with those who use the roads, including out-of-state residents, paying for their upkeep and improvements.

But they also supported Gov. Nikki Haley’s call last session for coupling a phased in 10 cents a gallon gas-tax increase with a 2 percent reduction in the income tax. But they want to take it further by eliminating the income tax.

“I would rather see everybody who pays for the roads be the ones who use the roads,” Grooms said. “There’s a lot of folks who are getting a free ride on the backs of those who are here working.”

Both know, however, that there will be a showdown between several lawmakers who believe the state should not increase the gas tax, and instead use the extra money in the budget to fix the roads. But Shealy said if lawmakers are serious about heeding to the call citizens have made to fix — and properly maintain — the state’s roads, using extra money when they come by it just won’t do.

“If we get them fixed, we can’t let ourselves get back to where we are now,” Shealy said. “And where we are now is abysmal place. Our roads are just going to just get worse and worse.”