- BIG STORY: S.C. GOP’s middle class tax hike in trouble
- MORE NEWS: State education board pushes back against book ban regulation
- LOWCOUNTRY, Ariail: On Nancy Mace’s mouth
- BRACK: May the Force be with us
- MY TURN, Ulbrich: What’s wrong with South Carolina’s income tax reform bill
- MYSTERY PHOTO: Maybe impossible
- FEEDBACK: On U.S. Department of Education cuts
S.C. GOP’s middle class tax hike in trouble
By Jack O’Toole, Capitol Bureau | A much-ballyhooed Republican income tax plan is in trouble in the South Carolina House, where nine co-sponsors withdrew their support this week after an analysis showed the proposal would raise taxes on most taxpayers. Meanwhile, the powerful Ways and Means Committee on Thursday delayed a vote on the measure.
The bill’s apparent collapse, at least in its current form, came just eight days after state GOP leaders, including Gov. Henry McMaster and leaders of the S.C. House and Senate, unveiled the legislation at a high-profile March 26 news conference.
The measure, they said at the time, would give S.C. residents a historic tax cut by lowering the state’s top income tax rate from 6.2% to a 3.99% flat tax for all – with the possibility of it going lower depending on the state’s growth.
“Everybody should pay something,” House Ways and Means Chairman Bruce Bannister (R-Greenville) said then. “And that’s the beauty of a flat rate — those whose pay is lower will pay less in taxes and those who earn more will pay more.”
But on April 1, a bombshell report from the state’s Revenue and Fiscal Affairs Office revealed the plan would raise taxes on the vast majority of Palmetto State residents earning less than $120,000 a year.
For instance, based on numbers in the report, a teacher or warehouse worker making $50,000 a year likely would get socked with a $600 tax increase. A marketing manager or HVAC technician making $75,000 would see their taxes rise by $800.
Members of the S.C. Freedom Caucus, a hard right faction in the S.C. House that often battles with the body’s establishment GOP leaders, were quick to pounce.
“Republican leadership wants more of your money and are attempting to fool you into believing they are lowering your taxes,” the caucus said in a March 31 statement. “Call your Rep. now and tell them to actually cut taxes and help the middle class!”
State Democrats, happy to have the chance to label S.C. Republicans as the party of tax and spend, were even more caustic, with one telling the Charleston City Paper that the so-called “tax cut” reminded them of an old S.C. saying:
“Figures don’t lie, but liars figure.”
How we got here
As the City Paper reported in early January, a broad-based tax increase was always the likeliest outcome of the GOP’s pledge to flatten the tax code this legislative session.
The reason? Despite a top income tax rate of 6.2%, the average South Carolinian only pays 2.9% after the state’s generous standard deduction. More than 40% of taxpayers pay no income tax at all thanks to the way the tax code is written.
In the story, Neva Butkus, a tax policy analyst with the Institute on Taxation and Economic Policy in Washington, D.C., noted taxes have tended to go up for most residents in states with flatter tax codes.
“Since 2021, about half the states in the country have ‘cut’ income taxes,” Butkus told the City Paper. “And they eventually have to pay for that with something. Usually, raising or expanding sales taxes and fees or kicking responsibilities down to the locals, all of which ask more of lower- and middle-income families.”
Here in S.C., the tax-increase mechanism is different. Rather than openly raising sales taxes or fees, the state GOP plan quietly eliminates the current standard deduction — the very thing that keeps taxes low for most residents.
And the result is exactly what Butkus predicted in January: Bigger bills for the average taxpayer.
Nevertheless, some GOP House members were still defending the plan as late as Tuesday, arguing that a flat income tax was the only alternative to democratic socialism.
“Once again the S.C. Freedom Caucus is joining forces with Bernie Sanders and Democrats to redistribute wealth instead of offering historic tax reform,” Rep. Brandon Guffey (R-York) said in a social media post.
But Freedom Caucus Rep. April Cromer (R-Anderson) ignored the ideology and kept pounding the numbers, noting again that the leadership tax cut was actually a tax hike for most.
“That’s not just misleading, it’s unacceptable,” Cromer said. “It is unthinkable that any conservative would support a plan that increases taxes on hardworking families.”
What’s next
At Thursday’s Ways and Means meeting, Bannister and bill sponsor Rep. Brandon Newton (R-Lancaster) said they needed more time to revise the bill before forwarding it to the full House.
“We don’t think it’s right to vote the bill out at this time but instead to make sure we know exactly what we’re doing before we pass a bill to the floor and then try to amend it,” Newton said.
But those changes would have to be significant to win the support of skeptical Freedom Caucus members, according to caucus chair Rep. Jordan Pace (R-Berkeley), who says his members want to see tax cuts offset by spending cuts.
“Raising taxes on one group to cut taxes on another is morally bad and economically stupid,” Pace told Statehouse Report after the committee hearing. “By taking $500 to $700 dollars away [from working people] and giving it to people at the top end of the earning spectrum, you’re actually removing a giant chunk of money from the economy and reducing economic activity.”
Regarding the plan’s seeming collapse, Pace pins the blame squarely on party leaders.
“I don’t think a lot of my colleagues who signed onto the bill and were at that press conference knew what was in the bill,” he said. “I think leadership, intentionally or not, pulled the wool over members eyes, and now they’re getting their comeuppance.”
- Have a comment? Send to: feedback@statehousereport.com.
Education board pushes against book ban reg
By Jack O’Toole, Capitol bureau | Clearly frustrated by a process that many members see as out of control, the state Board of Education on April 1 deferred action on 10 books it has been asked to remove from state public school libraries.
“I’m concerned about potential abuses of a process that we intended to be fair and equitable,” said Myra Slaughter, the board member for Calhoun, Dorchester and Orangeburg counties.
The deferral came amid growing concerns about Regulation 43-170, the state rule that governs book removals. Under the regulation, any parent can challenge any school library book containing depictions of “sexual content,” triggering a review by the state education board.
Since the rule took effect last year, 12 books have been removed or restricted. If the board had removed the 10 books under consideration Tuesday, the state would have surpassed Utah for the most books banned from public schools.
Of particular concern, some members said, was that a majority of the banned books were challenged by one parent in one school district.
“I don’t think somebody from Beaufort should make me drive here from Myrtle Beach every meeting to talk about more books,” board member Ken Richardson, who represents Horry and Georgetown counties, said. “My question is, when does this thing stop?”
ACLU of S.C. Advocacy Director Josh Malkin lauded the deferral in an April 1 statement.
“It is reassuring that the State Board of Education is prioritizing the rights of families, students, and educators rather than the handful of South Carolinians who feel scarily comfortable taking the rights of others,” Malkin said. “I hope that the board will take the time to craft a democratic policy that considers the full context of a written work.”
The board is expected to revisit the issue at its May 6 meeting.
In other recent news
Utilities, environmental groups back deal to build Lowcountry gas plant. After killing a similar bill last session, the S.C. Senate came to a late-night agreement April 2 that would reform the state’s energy permitting process and clear the way for the conversion of a former Lowcountry coal-fired power plant to natural gas.
U.S. Supreme Court divided on S.C. push to ban Planned Parenthood funding. U.S. Supreme Court justices appeared to be divided during Wednesday’s oral arguments over Gov. Henry McMaster’s long-running effort to cut off Medicaid funding to Planned Parenthood. At issue: Do Medicaid patients have the right to choose their own providers for medical services?
McMaster’s public health pick fails to advance. The S.C. Senate Medical Affairs Committee declined to give a favorable report to Gov. Henry McMaster’s nominee, Dr. Edward Simmer, to lead the Department of Public Health.
S.C. Senate to consider removing state treasurer. The S.C. Senate will hold a hearing on April 21 to begin determining the fate of state Treasurer Curtis Loftis, who was found by independent auditors to have been partially responsible for accounting errors that put the state in the middle of a federal fraud investigation. If fired, Loftis would be the first statewide elected official in S.C. history to be removed from office.
- RELATED: Loftis confirms 2026 reelection bid
S.C. House votes to ban ‘illegal’ DEI. The GOP-controlled S.C. House voted along party lines Wednesday to ban “illegal” diversity, equity and inclusion programs in S.C. government. Supporters argued the last-minute addition of the word “illegal” means that legal diversity efforts can continue. Critics said it would still have a “chilling effect” on legitimate programs.
S.C. Senate votes to expand school meals. The S.C. Senate voted unanimously Wednesday for a bill that would expand the state’s school lunch program and safeguard it against possible federal cuts. To become law, the legislation would have to also be passed by the S.C. House and signed by the governor.
S.C. lawmakers bet on horse racing bill. For years, the Palmetto State has attempted to pass legislation allowing South Carolinians to participate in horse race betting. They haven’t been able to reach the finish line as the legislation has been met with stark opposition from those concerned about gambling addiction.
Bill would ban credit card coding for gun sales. Legislation advancing in the state House would ban credit card companies from tracking sales of guns or ammunition and ensure no government agency in South Carolina keeps a registry of gun owners.
S.C. lawmakers push to criminalize revenge porn. South Carolina stands alone in the country as the only state that has no law on the books targeting revenge porn, but legislation advancing at the State House would finally remove it from that list.
Weaver bans racial, gender terms in S.C. Education Department docs. In a March memo, state Superintendent of Education Ellen Weaver directed employees to not use terms related to certain racial and gender “ideologies” in official department documents. Banned terms include “antiracism,” “social-emotional learning,” “diversity, equity and inclusion” and “critical theory.”
Cooper River Bridge Run stories: Annual race generates wellness plus lifetime of memories. While most “get over” the bridge and finish the race, many treasure the experience of running with waves of people headed to complete a common goal. And that, in turn, inspires stories, tens of thousands a year. Here are some of them.
On Nancy Mace’s mouth
Award-winning cartoonist Robert Ariail has a special knack for poking a little fun in just the right way. This week, he shines a light on some of the words that recently have come out of the mouth of Lowcountry GOP Congresswoman Nancy Mace.
- Love this week’s cartoon or hate it? Did he go too far, or not far enough? Send your thoughts to feedback@statehousereport.com.
May the Force be with us
By Andy Brack | It feels like the Alliance to Restore the Republic is starting to stand up to the authoritarian Empire sought by President Donald Trump, whose blitzkrieg of cruel executive orders over the last two months shocked and awed the establishment.
Our federal courts seem to be responding finally with rulings as a dizzying array of lawsuits continue to challenge Trump 2.0 on everything from immigration and foreign aid to whether a so-called Department of Government Efficiency can get rid of longtime government workers in the National Park Service, U.S. Department of Education, Pentagon and on and on.
Among the lawsuits is a case filed by the Southern Environmental Law Center on behalf of a North Charleston nonprofit and others that seeks to keep the administration from its yo-yo of turning off and then on grant funding that has already been approved.
By the end of March, according to The New York Times, federal judges temporarily paused more than 50 of the administration’s initiatives, which led Trump to thrash back, calling “for the impeachment of a federal judge who ruled against his administration on deportation flights, earning a rare public rebuke from Chief Justice John G. Roberts Jr.”
The Force got a big boost this week when U.S. Sen. Cory Booker, D-N.J., took the Senate floor for a record-breaking 25 hours (beating a 1957 civil rights filibuster by the late U.S. Sen. Strom Thurmond of South Carolina) to shine a light on how the country is at a “moral moment” as a representative democracy. The speech reportedly got more than 350 million TikTok likes with more than 300,000 watching at the same time, according to media reports.
Booker said he spoke because he believes the nation is in crisis.
“I believe that not in a partisan sense, because so many of the people who have been reaching out to my office, in pain, in fear, having their lives upended, so many of them identify themselves as Republicans.
“Bedrock commitments are being broken; unnecessary hardships are being borne by Americans of all backgrounds; and institutions, which are special in America…are being recklessly and, I would say, even unconstitutionally attacked and even shattered.”
He said what is happening in America is not normal and should not be treated as such.
“Generations from now will look back at this moment and have a single question — where were you?”
NBC News summarized the impact: “It was a cathartic moment for a vast swath of demoralized voters across the country, who tuned in amid hunger for some action by the opposition party beyond the traditions of business as usual.”
In the same week that Booker’s speech gave hope to many across the deeply divided nation, something happened in Columbia that also smacked of the Force getting a handle on legislative hubris: State Republican leaders, giddy just a week ago over a proposal to transform the income tax into a flat tax, started backing away from the proposal after getting lots of egg on their faces about how the cut would make the majority of South Carolinians pay more, not less, in taxes.
An odd coalition of hard right Republicans and Democrats joined to squeal about the unfairness, sending the leadership back to the drawing board to figure out a way to stanch the bad public relations blood spewing from the wounded bill. As of Friday, at least nine Republican House members – in a fit to get away from the bill after hearing screams of constituents – took their names off the measure. More will join – even as the leadership tries to rewrite the half-cocked, ill-conceived policy proposal designed to benefit the state’s wealthy.
Mainstream Americans of both parties have been floundering for the last couple of months, wondering what to do to save the republic. Now, for a change, they’ve got a little hope. The threat isn’t over, but maybe late March will be remembered as when the tide started turning against Trump 2.0.
May the Force be with the U.S.
Andy Brack is editor and publisher of Statehouse Report and the Charleston City Paper. Have a comment? Send to: feedback@statehousereport.com.
Ulbrich: What’s wrong with S.C.’s income tax reform bill
By Holly Ulbrich | South Carolina’s new proposal for a flat income tax, H. 4216, seems to be on the fast track for what is billed as a tax cut. Maybe. But not for most of us.
The federal standard deduction, expanded in the first Trump administration, would be cut for state tax purposes from $15,000 ($30,000 for a married couple) to a miserly $,6000 and $12,000, respectively. Then it is phased out until it disappears at an adjusted gross income of $40,000.
But wait, there’s good news. The tax rates would be changed from a two-step schedule of 3% and 6.3% to a single flat rate of 3.99% (just so we can claim to be lower than our neighbors). That’s a tax cut, isn’t it?
Yes and no. The General Assembly giveth and the General Assembly taketh away. The federal standard deduction, which was also followed in South Carolina’s state income tax, gives people at the bottom a little relief and makes the income tax just a little bit progressive.
That’s “economist-ese” for taking a smaller percentage of income in taxes for poor people than rich people. Our other state and local taxes on sales and property, and our fees and charges for government services, are regressive. They take a larger share of income from the poor than from the rich. So, the income tax has provided a partial equalization of the total tax liability across households at different income levels.
According to estimates by the S.C. Department of Revenue and Fiscal Affairs, if your family is in the median income range of $50,000 to $75,000, more than 80% of you will discover that your income taxes will go up, not down. Less than 10% of households in the income range of $300,000 to $500,000 will have that same sticker shock, but rather will see a steep reduction.
Revenue from the individual income tax is expected to decline by about $216 million in the first full year.
Bottom line: This is a tax cut for the wealthy, plain and simple. And unlike the usual justification – attracting business – the personal tax rate will now be lower than the business tax rate.
That’s not the only problem with this bill. With no chance to itemize, citizens with heavy medical expenses and/or generous charitable contributions or lots of interest on their home mortgage and/or student loans will have to rethink their priorities. Medical expense deductions are important for many disabled or elderly citizens, especially if there is a family member in a nursing home. Medicare is not much help there—and the future of Medicare is uncertain.
South Carolina is riding a wave of revenue growth that is overdue for correction. The stock market is flailing, consumer confidence has dropped, tourism prospects (important to our state) are dismal as people from other nations are reluctant to come here, and tariffs are likely to revive inflation that has just returned to more normal levels (not counting eggs).
The state’s definition of income for tax purposes will still be tied to the federal definition of adjusted gross income but that may change if Congress, worried about ballooning deficits, fails to extend the tax cuts from the first Trump administration. The legislature has made a number of commitments, such as higher teacher pay and a larger state contribution each year to protect the soundness of the retirement fund. Legislators may not be able to fund these priorities if revenue from the income tax falters, as it does with either tax cuts or recessions.
This bill needs to go in the circular file and start again.
Holley Ulbrich is retired professor emerita of economics from Clemson University.
This one may be impossible
This mystery photo may be impossible, so we’ll tell you it’s in Columbia. But where specifically is it? Send your name, hometown and guess to: feedback@statehousereport.com.
Our most recent mystery, “Open bridge,” shows the Ashley River Memorial Bridge in Charleston, which Allan Peel of San Antonio, Texas, describes as “a one-way double-leaf bascule bridge (drawbridge) that carries southbound Savannah Highway traffic across the Ashley River from Spring Street in downtown Charleston to U.S. Highway 17 and St. Andrews Boulevard in West Ashley. Originally built in 1926, it is 1,733 feet long, 34.1 feet wide, with the longest span stretching 158.1 feet across. It was the first permanent bridge to connect Charleston and West Ashley and contributed greatly to the mobility of people living in the area at the time.”
Others correctly identifying the photo were: Lester Dempsey, Wayne Beam of Clemson; Steve Willis of Lancaster; David Lupo of Mount Pleasant; Bill Segars and Don Clark, both of Hartsville; Nancy Barksdale of Columbia; George Graf of Palmyra, Va.; Curtis Joyner of Charleston; and Truett Jones of Summerton.
- Send us a mystery picture. If you have a photo that you believe will stump readers, send it along (but make sure to tell us what it is because it may stump us too!) Send to: feedback@statehousereport.com and mark it as a photo submission. Thanks.
On U.S. Department of Education cuts
To the editor:
I feel Trump did the right thing and brought it back to the states to do. The feds give it a one-size-fits-all and that is not the case as the U.S. ranks close to last or last in the developed countries in education.
With the money they get (Dept of Ed.) this is the best they can do? I don’t think so as the U.S. spends the most per child than all countries. It doesn’t take a brain surgeon to figure out that our system stinks. Time to change it and hopefully for the better.
– Jon Marien, Rock Hill, S.C.
Send us your thoughts
We encourage you to send in your thoughts about policy and politics impacting South Carolina. We print non-defamatory comments, but unless you provide your contact information – name and hometown, plus a phone number used only by us for verification – we can’t publish your thoughts.
- Have a comment? Send your letters or comments to: feedback@statehousereport.com. Make sure to provide your contact details (name, hometown and phone number for verification. Letters are limited to 150 words.
Statehouse Report, founded in 2001 as a weekly legislative forecast that informs readers about what is going to happen in South Carolina politics and policy, is provided by email to you at no charge every Friday.
- Editor and publisher: Andy Brack, 843.670.3996
- Statehouse bureau chief: Jack O’Toole
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