COLUMBIA,
S.C. (AP) - The House on Wednesday approved a proposal pushed
by Gov. Mark Sanford that would lower the state's income tax.
The bill, which passed on second reading by a 86-24 vote,
would lower the income tax from 7 percent to 4.75 percent over
the next decade.
The measure calls for the state to cut the state's top
income tax rate by .225 percent in each of the next 10 years.
The first year's reduction is automatic. Future decreases
would depend on the Board of Economic Advisors forecasting
growth in the state's economy by 2 percent or more in each of
the ensuing years.
That 2 percent growth rate generates about $100 million. In
the first full year, the tax break amounts to $50 million. By
the 10th year, the state will have $959 million less to spend
than if the reduction hadn't taken place.
Opponents have expressed concern that the BEA hasn't been
accurate with its forecasts in recent years.
"This is election year politics at the expense of good
government," said House Minority Leader James Smith,
D-Columbia. "Economists ... will tell you this is the wrong
idea at the wrong time."
Smith said he's concerned the reduction in revenue will
negatively impact spending on core government functions like
education, health care and public safety.
But supporters say the reduction will help create jobs and
raise the standard of living.
"We know you don't raise the standard of living by raising
taxes," said House Speaker David Wilkins, R-Greenville.
"Instead you cut taxes, get government out of the way and let
the private sector do what it does best - grow the economy and
create jobs and opportunity. This income tax reduction plan is
the first big step in doing just that."
Sanford praised lawmaker's actions.
"We've taken a huge step forward in helping realize our
shared goal of creating jobs, attracting capital investment
and raising income levels here in South Carolina," Sanford
said. "This income tax relief plan is absolutely essential to
our efforts to build a stronger business climate here in our
state - one that will grow and expand the small businesses
that form the backbone of our state's economy."
The bill faces a routine third reading on Thursday before
heading to the Senate for debate.
The House on Wednesday also overwhelmingly approved two
bills that would reduce or eliminate property tax
reassessments.
The first bill eliminates property tax reassessments that
critics say keep homeowners from ever truly owning their
houses. Under that measure, the assessed values of homes could
only increase when a house is sold. That bill passed with a
99-11 vote.
The House also approved a similar bill on 104-5 vote. The
second bill caps the increase in assessed values to 15 percent
during a five year period.
With both bills passing, the Senate will have to decide
which is the best course for taxes, said Rep. Vida Miller,
D-Pawleys Island and the author of the second bill.
But the Legislature had to act on the issue, said House
Ways and Means Committee Chairman Bobby Harrell, R-Charleston.
"If we don't make a change in how we do reassessment,
people are going to get taxed out of their homes," he
said.
