The S.C. Senate this week amended and approved an income tax cut that the S.C. House approved last year. But senators’ version, more than doubled the cost of revenue the state would lose to $309 million thanks to a proposed steeper cut to the top rate.
Under the Senate’s Tuesday version, which reduces the top rate from 6% to 5.21%, some 43% of S.C. filers would see lower income tax bills next year, while 57% would see no change or a small tax increase due to technical changes in the way income is calculated.
GOP leaders in the S.C. House and Senate say cuts to the top rate are necessary despite the state’s low average income tax rate of 2.9%. Why? They say they need to be more competitive with states like Georgia and North Carolina, where the average rate is actually higher but the nominal rate looks lower on paper.
The bill now heads back to the House, where members will have to decide whether to accept the Senate’s changes or schedule a conference committee between the two chambers to work out their differences.
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