Senator proposes eliminating state’s individual income tax

abeam@thestate.comDecember 17, 2013 

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    Pre-filed bills

    Tuesday was the last day state senators could file bills in advance of the 2014 legislative session. A sampling of what lawmakers filed Tuesday:

    Dating violence would become a crime: S.869 would define the crime of “dating violence.” It says a dating relationship is “characterized by the expectation of affection between the parties” and adds a “dating relationship does not require sexual intimacy.” The proposed penalties are the same as those for criminal domestic violence. The bill would not apply to “violence in a casual acquaintanceship or violence between persons who have only engaged in ordinary fraternization in a business or social context.” And it does not apply to anyone under the age of 18. Sponsor: Sen. Darrell Jackson, D-Richland

    Texas-style abortion regulations: S.875 says any abortion not performed at a hospital must be performed by a doctor with "admitting privileges at a local certified hospital." It is similar to Texas HB.2, which inspired an 11-hour filibuster by Texas state Sen. Wendy Davis that garnered national attention. The Texas law passed but a challenge of its constitutionality now is headed to the U.S. Supreme Court. Sponsor: Sen. Larry Grooms, R-Berkeley.

    Gas tax increase: S.891 would increase the state’s gas tax by 2 cents every year until the tax reaches 36 cents a gallon. The tax now is 16.5 cents a gallon, the third-lowest in the country. Road funding has been a priority for Republicans and Democrats. But GOP Gov. Nikki Haley has vowed to veto any increase in the gas tax. Sponsor: Sen. Ray Cleary, R-Georgetown.

    Higher court fines: S.894 would impose a $5 surcharge on all “fines, forfeitures, escheatments, or other monetary penalties” in state, county and city courts. The money would pay for training at the S.C. Criminal Justice Academy. Sponsor: Sen. Shane Massey, R-Edgefield

    Tougher penalties for domestic violence: S.904 would increase the penalties for criminal domestic violence. A first conviction would carry a sentence of not more than a year in prison, while a second conviction would have penalties ranging from 90 days to three years in prison. The bill was filed by state Sen. Katrina Shealy, the Senate’s only woman. Democratic state Rep. Bakari Sellers filed a similar bill in the House. Sellers, a Democrat, is running for lieutenant governor. Sponsor: Sen. Katrina Shealy, R-Lexington.

    Online sales taxes: S.870 would require online retailers to collect state sales taxes if they have sales of more than $10,000 a year to S.C. residents. The bill would not apply to a retailer that "owns, leases, or utilizes a distribution facility in this State." It appears Amazon.com, which has a Lexington County distribution facility, would be exempt. Sponsor: Sen. Marlon Kimpson, D-Charleston.

    No more “knockout” videos: S.878 would make it illegal to publish video or audio of a violent crime. It is a response to the “knockout” game that has been reported in some cities, where people try to knock out unsuspecting pedestrians with one punch and then post videos online. The bill has exceptions for police, private investigators and journalists. Sponsor: Sen. Vincent Sheheen, D-Kershaw

    No tanning beds for teens: S.879 would ban anyone younger than 18 from using a tanning bed. The bill’s sponsor, Sen. Vincent Sheheen, said he was inspired by the death last month of a younger cousin from a skin cancer not related to a tanning bed.

    Closed primaries: S.895 would bar voters from casting ballots in a partisan primary “unless the person has registered as being a member of that party.” The bill would take effect "upon the signature of the governor," so it could be in effect for the June 2014 primary elections. That could benefit the bill’s sponsor, state Sen. Lee Bright, a Tea Party favorite, who is challenging U.S. Sen. Lindsey Graham. Graham’s supporters tend to be traditional Republicans and independents. Under Bright’s proposal, independents would not be allowed to vote in the primary unless they registered as Republicans.

State Sen. Katrina Shealy wants to eliminate the state’s individual income tax, and she has Republican Gov. Nikki Haley’s blessing.

The Lexington County Republican filed a bill Tuesday that would abolish the state’s individual income tax over the next five years. If the bill becomes law, South Carolina would join seven other states – including Texas and Florida – that do not have state income taxes.

“That would be like a 9 percent cut (in the first year followed by other cuts) if every agency cut their budget,” Shealy said. “My husband has gone without a paycheck the last two years because the way his business has been. ... So if we’ve had to do it, the state needs to do it, too.”

South Carolina would lose $3.4 billion in revenue – more than half of its general fund. Shealy does not propose to replace that money with other taxes. Instead, she says the government should spend less.

Initial reaction from other Republicans, who control the Legislature, was skeptical.

“It’s very easy to propose doing away with all taxes, but there are actual reasons that we raise money,” said state Rep. Tommy Stringer, who led a House Republican tax study committee and has proposed several tax reforms. “There is infrastructure, prisons, law enforcement, education – all these things.”

Haley, a first-term governor who is seeking re-election next year, previously has endorsed smaller income tax cuts and proposed eliminating the state’s smaller corporate income tax. Tuesday, her spokesman said she supports Shealy’s bill.

“As we have seen firsthand, when you create a stronger business environment, more people get jobs – and eliminating the income tax in South Carolina will carry us to a whole new competitive field,” Doug Mayer said.

State Sen. Vincent Sheheen, D-Kershaw, the likely Democratic nominee for governor, opposed Shealy’s bill, saying he is for “a balanced tax system.”

“I think we ought to continue to have public schools in South Carolina,” Sheheen said.

The bill is unlikely to reach Haley’s desk, given recent history.

Republican legislators have been unable to agree on much smaller tax cuts. In 2012, a fight over a $64 million tax cut for small-business owners delayed the state budget passing by its June 30 deadline. Lawmakers avoided a state government shutdown by passing a continuing resolution. That tax cut eventually passed, but others – including proposals to cut taxes for the average taxpayer by $29 and $86 – have gone nowhere.

S.C. residents pay from zero to 7 percent in taxes, depending on the size of their taxable income. (Taxable income is how much money you earn in a year, minus any tax deductions or credits you qualify for, such as for dependents or mortgage interest.)

In his book, “The Right Way,” Sheheen proposed adjusting the state’s tax brackets to lower taxes on the middle class. It is similar to a plan Haley has endorsed in her executive budget proposals that would consolidate the 5 and 6 percent tax brackets, saving the average taxpayer about $29 a year while cutting $26 million from the state budget.

Rep. Stringer has sponsored a bill in the House – H.3266 – that would combine the state’s 3, 4, 5 and 6 percent tax brackets into one bracket taxed at 3.75 percent. That plan would cut state income taxes by $86 for the average taxpayer and cost the state $80 million.

Stringer said his bill is a priority of the House Republican Caucus this year and he expects it to pass the House, where all 124 members are running for re-election.

It’s unclear if Stringer’s bill has support in the Senate.

Attempts to reach Senate Finance Committee chairman Hugh Leatherman, R-Florence, were unsuccessful Tuesday.

Reach Beam at (803) 386-7038.

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