Bill Comes Due in South Carolina
South Carolina's free lunch comes to an end today. A controversial "tax swap" enacted last year repealed all homeowner property taxes for school operating costs and reduced the state sales tax on groceries — and partially paid for these tax cuts by increasing the sales tax rate on all other items by a penny. Residents of the Palmetto State have been enjoying the reduced grocery tax since last fall, but the extra penny of sales tax only takes effect today. So, for the first time since the tax swap was enacted, South Carolinians will get a taste of the plan's real impact on them. Low-income families, especially renters, will likely be shortchanged by this move, while wealthier homeowners will enjoy the lion's share of the tax cuts. The State newspaper puts it all in perspective here.
Adding insult to injury, state lawmakers are now contemplating cutting the state's income tax rates. House lawmakers want to cut the top rate, while the Senate wants to cut the bottom tax rate. Unfortunately, neither change will do a thing for the low-income families hit hardest by last year's tax swap.
