COLUMBIA, S.C. — Several lawmakers in South Carolina want to eliminate the state income tax.
There are several ideas already on the table and some of them have already been introduced as bills in the state legislature, including one by a state representative from our area.
One of the economists behind the idea claims South Carolina can eliminate its state income tax without raising other taxes.
“If you’re not moving down in income taxes right now, you’re losing out on other states,” said Vance Ginn with the South Carolina Policy Council.
The council supports the move to reduce or eliminate the state income tax. Ginn says the plan would not require raising other taxes, like the sales tax, if the government limits its spending to no more than the rate of state population growth plus inflation.
“As the economy grows, as the government is restraining its spending, over time, we won’t need the income tax anymore, because you’ll have more sales taxes that will come in to fund the things the state’s already funding today,” Ginn said.
Ginn says the plan puts pressure on state legislators to stop excessive spending.
“We understand that can be difficult, but in order for there to be a more competitive state economy where people can have more jobs and prosperity, this is a great path to go down,” Ginn said.
Currently, South Carolina has a progressive state income tax that goes from zero to 6% as your pay increases. North Carolina’s is a flat 3.99% in 2026.
Tennessee and Florida don’t have a state income tax.
Economists say relying on sales taxes instead of income taxes shifts the burden from higher-income families to those who earn lower and middle incomes, since they’ll spend a higher percentage of their income on taxes.
Ginn admits this is true but says the tradeoff is that some families will have more choice about how to spend their money.
“So that reduces your liberty. It reduces your opportunity to spend the way you would like to spend it -- on sales taxes. On the other hand, you get to keep all of your money when we get to zero income taxes. And when you do that, then you get to choose what you consume on, what you save,” Ginn said.
We’re keeping an eye on the bills as they move through the South Carolina legislature, and we’ll bring you any updates.
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