Gov. Mark Sanford may be right in thinking that reducing the top S.C. income tax rate from 7 percent to 4.25 percent would, in time, fuel economic growth. But as most S.C. senators seem to realize, Sanford's plan also would reduce state revenue by more than $1 billion per year, once the rate reduction is fully phased in.

Their concern: How do you continue to pay the costs of state government while waiting for Sanford's growth to occur? Because a billion dollars is a little less than 20 percent of the state's total revenue, you'd have to slash or eliminate state programs to pay for the tax cut.

For that reason, it's just as well that senators prefer a tax-cut alternative that the state can afford near term: Sen. Hugh Leatherman's proposal to reduce the income tax rate for small businesses from 7 percent to 5 percent. That plan, which would grant small businesses tax parity with corporations, would cost the state $100 million.

Leatherman's proposal would target the tax cuts to businessmen and women who could use their tax savings to create jobs and raise employees' salaries. Sanford's plan, in stark contrast, targets tax savings not only to business owners but also to wealthy individuals. Folks in the latter group would not necessarily reinvest their savings in the state's economy. Leatherman's approach makes more sense.

As folks along the Grand Strand know well, small business is the foundation of the S.C. economy. If average earnings per worker and total small-business employment increase as a result of a Leatherman-style tax cut, which is likely, an increase in statewide economic activity would follow, in short order. Such new activity would create still more new jobs - while also increasing collections of all state and local taxes, including the individual income tax.

As chairman of the Senate's Finance Committee, Leatherman, R-Florence, clearly understands how publicly assisted economic development should works. You tailor the public assistance to produce a clear public benefit.

In pushing for his version of the income-tax cut, Sanford appears - appears - to be as interested in starving government to reduce its size as he is in birthing new economic activity. "Starving the beast" might be acceptable public policy if S.C. government were bloated with waste and unnecessary programs. But it's not - due in part to Sanford's fiscal leadership in the past two low-revenue years. State agencies have shed hundreds of jobs. If state programs get much leaner, or disappear, the result will be real pain for the South Carolinians who benefit from them.

Sanford appears dug in on this issue. So far, the House, which passed his plan again this year, supports him. If the Senate guts the House bill and substitutes the language of Leatherman's bill, the outcome well might be no change in income tax rates.

No change would be better than Senate acquiescence to Sanford's plan but would provide no help to overtaxed small businesses. If House Republicans really mean their fervent words about unshackling small business to produce new S.C. wealth, they'll find a way to compromise with senators on this issue.