GREENVILLE, S.C. (WSPA) – South Carolina Gov. Henry McMaster told Upstate business and community leaders that he will ask for the marginal income tax rate to be lowered from seven to six percent.
McMaster discussed his plan Wednesday at the “Ten at the Top” luncheon.
The tax cut would mean the average household in Greenville County making $54,000 a year would save about $540 on their annual tax bill.
“I think it’d be good…since it’s helping everybody save money,” said Greenville County resident Tyler Simpson.
State Representative Bruce Bannister said the move would bring South Carolina more in line with tax rates across the southeast.
“The states around us are lowering their income taxes for the purpose of attracting citizens,” said Bannister, a Republican who represents Greenville County. “We’ve got to stay competitive with them.”
The tax reduction would reduce revenue by about $565 million a year. 7News asked Bannister if that would result in higher taxes elsewhere. He said it depends on the state’s goals.
“If you didn’t want to drop state revenue by that amount of money, you would have to raise taxes somewhere else,” he said. “People have talked about increasing the sales tax, decreasing the exemptions that are available on sales tax, and sort of adjusting what is or isn’t taxed.”
McMaster also asked the General Assembly for the one percent drop in the marginal income tax over a five-year period in his executive budget last year, but it didn’t pass. A spokesperson with the governor’s office said they are optimistic that this year’s increased revenue will encourage lawmakers to support the governor’s proposal in 2020. The state expects more than a billion dollars in new revenue in next year’s budget.
McMaster plans to include the proposal for a lower marginal income tax rate in his executive budget in January, according to his spokesperson.