Let's change how we tax

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It's encouraging to hear that Senate Republicans have agreed to revive Gov. Mark Sanford's income tax reduction plan and give it the debate it deserves this week. Now the Senate should make sure the plan gets a floor vote. That means Democrats who oppose this bill must abstain from a threatened filibuster that would needlessly interrupt and stall the people's business.

On its merits, Sanford's plan deserves passage. Cutting this state's comparatively high income tax rate would obviously help many families who are now paying extraordinarily more for everything from health insurance to gasoline. It would also boost our economy by allowing top wage earners to spend or invest more of their money.

But this plan will have the biggest impact on small businesses. Lowering the state's highest income tax rate from 7 percent to 4.75 percent would give small businesses, which pay at the individual income tax rate, parity with corporations that pay only 5 percent on earnings. Small businesses are this state's primary job creator. This relief would make those enterprises more profitable and would improve the prospects of growth and expansion.

The bill sensibly ties tax relief to growth. Because revenue growth has been anemic over the past four budgets, South Carolina has been forced to do more with less. This state is underfunding even essential functions. Wisely, implementation of this tax reduction is conditioned upon the state's deficit being paid off and revenue growth eclipsing 4 percent. And the relief would be phased in over a 10-year period.

Of all the tax relief plans that have been proposed, this makes the most sense. It has potentially the widest benefits, touching virtually every South Carolinian. The relief it provides small business is especially attractive.

We often hear how South Carolina has lost 57,000 manufacturing jobs since the start of 2001. But the state has also lost 41,000 small-business jobs over much of the same period. Those manufacturing jobs aren't likely to come back. Clearly, this state's best chance of growing its own jobs lies in the vast potential of small business. Therefore, we must create an environment that encourages entrepreneurship, which this tax plan does.

Politically, passage of this tax-relief plan would be a needed and welcome victory for Sanford. He's a reformer who took office with grand ideas for shrinking government, centralizing accountability and imposing more efficiency on spending. However, most of Sanford's ideas have died in the Legislature. This plan, which has the potential to spur job creation and stimulate the economy, deserves to be held above politics and upheld for passage.