Making good policy decisions requires taking an honest look at our financial picture. And if we don’t look at long-term solutions to deal with our debt problem and uncompetitive tax code, that picture doesn’t look rosy.
South Carolina’s Uncle Sam is very generous, supplying nearly 38% of our budget, but he is also unstable. The federal debt as of today (May 1) at noon stands at approximately $18.21 trillion, and every year the debt grows larger. What if Uncle Sam goes unhinged? Wouldn’t it be sound financial policy for the state to have a plan for the sudden absence of our crazy uncle?
As states like Michigan and Wisconsin discover the secret sauce of right-to-work, South Carolina stands to lose that current competitive advantage. In the most recent release of the Rich States, Poor States Economic Competitiveness Index, while our current performance puts us at #20, our outlook has fallen to #32, largely based on our levels of debt and uncompetitive tax structure. Comprehensive tax reform is the single greatest next step we could take to ensure a bright outlook for South Carolina’s future. Our top marginal personal income tax rate is the highest in the Southeast. And while our corporate tax rate of 5% is one of the lowest in the nation, we exempt more corporate income than we collect, with the majority of credits accruing to larger, newer companies rather than smaller, older in-state companies. This imbalance cannot be sustained indefinitely and is not a long-term strategy for economic competitiveness. This report outlines key features of the tax system currently in place in South Carolina and is organized by key issues affecting the impact of our various forms of taxes on the economy.
This week, it felt like we were in a Washington-like bad dream as the Republican-led SC House debated a bill that would have put South Carolina $500 million in debt. Dr. Oran Smith describes how we woke up from this $500 million dollar nightmare and wound up back home.
The numbers don’t lie. If we don’t change our ways, the Palmetto State could be looking at a #1 ranking in debt and taxes. That’s great news…for North Carolina, Tennessee and Georgia, our closest competitors for jobs and new investment.