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Article published Feb 3, 2005
House OKs Sanford plan to trim top income
taxes
ROBERT W. DALTON
Staff
Writer
COLUMBIA -- For the second time, the state House has
approved Gov. Mark Sanford's plan to lower the state's top income tax rate from
7 percent to 4.75 percent.The House passed the bill by a 73-39 margin.It now
heads to the Senate, where it could face a tougher road.Lowering the rate is the
top item on Sanford's agenda. He believes it would create jobs by reducing the
tax burden for small businesses -- which pay at the 7 percent rate while large
corporations pay 5 percent -- and help attract wealthy retirees to the
state."Income tax relief is all about leveling the playing field for small
businesses and making our state more competitive in attracting jobs and capital
investment," Sanford said. "For the second year in a row, the House has stepped
up to the plate on this critical economic development front and gotten the job
done."Under Sanford's plan, the tax would be reduced by .225 percent each year
that the Board of Economic Advisors projects growth of at least 2 percent in tax
collections. The reduction would cost the state $6 million the first year and
about $1 billion when fully implemented.John Ruoff, research director of South
Carolina Fair Share, a consumer advocacy group, estimated that a married couple
with two children earning$25,000 per year would receive no benefit from the tax
cut. That same family would save about $382 if it earned $50,000 a year, and
about $1,507 if it earned $100,000 annually.House Democrats tried to derail the
bill by putting up a host of amendments dealing with property tax relief,
education funding and repaying trust funds raided during lean budget years.One
amendment that made it through would not allow a reduction to occur unless
funding for law enforcement is maintained at the previous year's level.House
Minority Leader Harry Ott, D-Matthews, said the income tax cut would make it
impossible to provide property tax relief because no money would be
available.The Democrats, who last year tried to totally eliminate property tax
relief during budget negotiations but have now become crusaders, drew the ire of
Speaker David Wilkins because of their tactics."There are people in this body
who have a history of supporting property tax relief, and many times we had to
take the Democrats along kicking and screaming," Wilkins said. "Now people want
to jump on the bandwagon. Come on, because we welcome you
Johnny-come-latelys."House Speaker Pro Tem Doug Smith said the Democrats'
strategy was good news for the state."It means they are levitating toward more
conservative positions like tax relief," Smith said. "I think it's
encouraging."Sanford said he's hopeful that the Senate will follow the House's
lead."Last year a majority of Senators supported income tax relief and we were
just two votes shy of breaking a filibuster and getting it to a vote," he
said."I'm hopeful with the rule changes we've seen on the Senate side that this
is the year when we can move this critical bill across the goal line."Robert W.
Dalton can be reached at 562-7274 or bob.dalton@shj.com.