Thursday, December 20, 2007

SC Gov proposes a Lower Flat income tax

Link

The budget Gov. Mark Sanford will propose for next year would lower the state's income tax by allowing residents to choose a flat tax.

Sanford would raise the state's lowest-in-the-nation cigarette tax to 37 cents a pack — from 7 cents — to offset the $107 million income tax cut.

Sanford said Wednesday his plan would make the state more business-friendly — and healthier.

"... Rates matter in terms of bringing jobs and investment to our state," Sanford said in a statement. "This plan has a host of benefits when it comes to improving the quality of life for thousands of South Carolinians by impacting the cost of smoking, and therefore the rate of smoking."

Under the plan, residents could choose to pay a flat 3.4 percent income tax rate. In exchange, they could claim no tax deductions or credits.

The state's top income tax rate is 7 percent. However, S.C. taxpayers can reduce their tax bill by claiming deductions or credits.