A new state House ad hoc committee announced this week will try to find ways to overhaul South Carolina’s tax laws.
House Speaker Jay Lucas announced the new House Tax Policy Review Committee on Tuesday. The 14-member bipartisan committee is tasked with reviewing South Carolina’s income, sales and property taxes. Lucas hopes to make the tax code “broader” and “flatter” — which conservatives usually say when they hope to eliminate deductions and exemptions in favor of a lower overall tax rate.
“Our outdated tax code needs a dramatic transformation in order to promote economic competitiveness and increase the size of our citizens’ paychecks,” Lucas said in a statement announcing the new committee. “Achieving this difficult task is long overdue, but necessary to ensure our tax code is fair for our taxpayers. A broader and flatter tax code will help continue to spur job growth and provide greater opportunities for South Carolina families.”
The committee will present its recommendations prior to the start of next year’s session in January.
South Carolina lawmakers have created several study committees examine the tax code over the past decade, but all have had little success at getting their recommendations adopted. The Tax Realignment Commission (TRAC) released a set of proposals that would have tried to broaden the tax base by charging a fee for anyone filing their taxes and adding sales taxes to numerous exempt items for a lower overall sales tax rate. But legislators nervous about the idea of reinstating a sales tax on groceries and prescription drugs did not even debate the recommendations.
Then in 2011 they tried again with a House GOP Caucus task force that recommended lowering the state’s business property tax assessment rate and ending two-thirds of South Carolina’s smaller sales tax exemptions. Both measures enjoyed some support in the House, but ultimately failed to pass the Senate.
House Speaker Pro Tempore Tommy Pope, R-York, will chair the new committee. He admitted the House does not have a good history of getting consensus around tax reform. “How would this committee be different? I hope the endgame would be that we actually get something done,” he noted drily to South Carolina Radio Network.
Pope said he personally hopes the recommendations can be revenue-neutral, meaning no net tax increase or decrease, in exchange for a more “fair” system. But he said the other 13 committee members will have to weigh in on whether to broaden the tax base by ending exemptions, changing the income tax brackets, or by lowering the overall tax rates.
“I recognize you have to roll up your sleeves and get to work,” he said. “So we’ll see what ideas come from it and see if we can get something that everybody can get behind, get it through the House and go from there.”