In his last official press conference as the state’s chief executive, Governor Mark Sanford presented a list of proposals for comprehensive tax reform. The proposals are based on research conducted by the state Department of Commerce. One proposal calls for a flat personal income tax at two to three percent. Sanford says presently many state citizens are called on to foot more than their fair share of the tax burden.
According to Commerce Department Economist Rebecca Gunnlaugson, who headed the study, 42 percent of taxpayers find themselves in the highest tax bracket of seven percent, which translates to 42 percent of all taxpayers in the state paying 96 percent of the tax burden. Gunnlaugson says no other state in the union has that taxpayer to tax burden ratio.
Sanford says a copy of the Commerce Department’s study has been presented to Tax Realignment Commission (TRAC) for their examination.
Sanford says to spur job creation and capital investment the state not only has to continue its efforts to recruit new businesses, it must also level the playing field for existing business large and small. To that end Sanford proposes a flat corporate income tax in the range of two to three percent, accompanied with an across the board property tax rate of four percent.
Sanford says creating a revenue-neutral optimal tax structure that broadens the tax base and lowers marginal tax rates lays the foundation for greater economic growth.
Sanford’s list of the proposals would include the removal of all sales tax exemptions on goods and services and institute a flat consumption tax on goods and services at two to three percent. Commerce Department Economist Rebecca Gunnlaugson says such a tax would be fair for all consumers.
Sanford says while it may cause some political fallout, the proposal would also mean reinstituting the sales tax on groceries. Currently the state’s sales tax is six percent. The maximum sales tax rate after local surtaxes is nine percent.