COLUMBIA, S.C. — House Lawmakers advanced a bill Tuesday that would cute income taxes for about 1 million South Carolinians.
The proposal would cut the state's top 7% income tax rate to 6.5% next year, while pushing all other taxpayers into a 3% bracket.
House Majority leader Rep. Gary Simrill and sponsor of the bill said he's confident the reform will bring relief for those who need it the most.
"This plan is the most thoughtful way and most effective way to create the lower tax for income in South Carolina for what it offers for every filer throughout the system," said Simrill.
The cuts would cost the state $600 million in the first year and $1 billion a year after 5 years when the proposal is fully rolled out.
Rep. JA Moore of Charleston and Berkeley counties said the state is in a prime position to enact this sort of change.
"I don’t foresee any challenges with funding this tax relief. It’s something that needs to happen," said Moore.
Gov. Henry McMaster along with Republican House leaders announced the effort last week, saying this kind of tax reform will boost South Carolina's economy.
The House Bill has received Bipartisan support. House Democrats like Rep. Gilda Cobb-Hunter "applauds" House Republicans for joining in on the effort to reduce taxes, but encouraged them to consider increasing funding to the state earned income tax credit.
"I applaud you on this current effort, I support this, but I encourage you to continue to think about tax relief, but think about you traditionally don’t think about," said Cobb-Hunter.
While the House discusses their proposal, the Senate will flesh out their own version. Senate Finance Chair Harvey Peeler introduced a similar proposal last week, which would decrease the highest tax rate from 7% to 5.7% right away.
It would also give $1 billion back to South Carolinians through a one-time income tax rebate.
Both plans would stop taxes on military retirement income.
The House will debate and likely vote on the bill Wednesday.
The two proposals comes at a time when the state has a $3 billion budget surplus. House Committee members also discussed Tuesday how to craft the state's $11 billion budget.