Issue Position: Tax Reform Plan

Issue Position

If we want to grow the economy for all of South Carolina, we must develop a tax policy that encourages growth and doesn't pick winners and losers. Let's eliminate the state personal income tax. We can also lower the state sales tax by 1%.

My tax reform plan takes the best components from the bipartisan TRAC commission recommendations and the best elements of the Fair Tax proposal so that we have a tax code that is pro-growth and revenue neutral.

We would start by eliminating most of the 110 sales tax exemptions, but keep the exemptions for prescription medications, groceries, and residential electricity and heating. Eliminating the remaining exemptions carved out by special interest would net us $1.6 billion in new revenue. Additionally, we should adopt bipartisan TRAC commission recommendations to broaden our tax base to focus on services. Current law exempts 133 of the 168 categories of services. These changes would reflect our modern economy, which has shifted from goods to services.

Finally, we should consider collecting South Carolina's fair share of sales tax on online purchases. Currently, South Carolina small businesses are at a competitive disadvantage to online giants. These reforms would net the state an additional $1.2 billion in new revenue. This new revenue would replace the lost revenue when we eliminate the state's personal income tax. It would also allow us to lower the state's sales tax from 6% to 5%. This tax reform plan makes common sense because it puts money back in the pockets of our taxpayers to spend how they see fit.

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