South Carolina Club for Growth - LEGISLATIVE - Issues

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PROVIDE TAX RELIEF

Nothing is more central to a vibrant, competitive economy than a tax climate that rewards savings and personal investment and encourages economic activity. The SC Club for Growth believes that any discussion on reforming the state’s tax structure – and any legislative proposals seeking to do so – must center on three core goals:

*Providing net tax relief that raises income levels for all South Carolinians
*Stimulating job growth and capital investment
*Slowing the growth of government to a more reasonable level

We believe that a reduction in property taxes is appropriate, especially taxes that threaten the loss of homes. However, any restructuring of the property tax must at a minimum be revenue neutral and at best allow more money to stay in the hands of our citizens. Additionally, it is crucially important that any tax changes be done in a way that will not harm our state’s business climate.

We also believe that our high income tax rate is a job killer that must be reduced. According to Ohio University Professor Dr. Richard Vedder, one of the nation’s foremost expert on state-to-state macroeconomics, the income tax has the most direct impact on job, investment and wealth creation. In fact, researching state tax structures during the 1990’s, Vedder found the following:

States that lowered their income taxes experienced three times the job growth of states that raised their income taxes.
States that lowered their income taxes saw a 42% increase in personal income levels over states that raised their income taxes.
Over 3 million citizens moved from one of the 41 states with an income tax to one of the nine states that do not have an income tax.

Many backers of big government argue that income tax cuts would drain precious revenue from state coffers. History shows this simply not to be true and that tax cuts are not limited to the Republican party. For example, New Mexico recently began cutting its top income tax rate from 8.2% to 4.9% over a five-year period under Democratic Governor Bill Richardson. In the first year of the tax cut’s implementation, income tax revenues in New Mexico actually grew by 9% – more than twice the rate of South Carolina’s income tax revenue growth over the same period.

South Carolina took a first step to tax climate competitiveness in 2005 by cutting the income tax on small businesses – which represent 95% of all businesses in-state – from 7% to 5% over four years. S.C. Club for Growth believes that similar tax relief should be extended to all working South Carolinians.

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