South Carolina lawmakers are embarking on a new tax program that is going to be, possibly, the envy of other states with higher tax burdens. This month, they reached a budget compromise that could have wide-ranging economic and social repercussions.
This agreement, which contemplates a budget of 13 billion dollars, includes the reduction of the income tax rate, salary increases for teachers and improvements in the prison system. Possibly (and we broadly agree with this) the most salient element of the new budget is the reduction of the income tax rate from 6.4% to 6.2% for most South Carolinians.
This measure would be financed with $100 million specifically allocated for this purpose. Earlier, the state had announced a five-year plan to reduce the top tax rate from 7% to 6%, reflecting a continuous trend towards decreasing the tax burden on citizens.
Less Taxes, Better Wages: Every American’s Dream
It is worth noting that this proposal differs from the one presented by the House of Representatives, which proposed a property tax refund worth $500 million.
The difference in approach between direct income tax rate reduction and property tax refund illustrates the various strategies for alleviating the tax burden.
The budget also includes salary increases for state employees and teachers… yes, sorry, only for state government employees and not for those in the private sector.
State employees earning less than $50,000 would receive a $1,125 raise, while those with higher incomes would receive a 2.25% increase.In the education sector, $200 million would be allocated to increase teacher salaries, raising the minimum wage to $47,000. This increase represents a significant increase of 70% compared to a decade ago.
Of Course, There Are Controversies With This Tax Plan in SC
Within the budget, there are more controversial elements, such as a ban on the use of cell phones in public schools during class time and a ban on students using bathrooms that do not correspond to their assigned sex at birth.
These measures have generated debates about individual rights and freedoms in the educational context, at a time when the United States is deciding on the future president, either the liberal Joe Biden, or the conservative Donald Trump, both with contradictory ideas in their own speeches but both affirming that they defend freedom.
What Are the Voices for and Against Saying?
Democratic state Senator Nikki Setzler has expressed her support for the budget, describing it as an achievement that everyone can be proud of. However, the implementation of these measures will depend on the approval of both the House and the Senate in the coming days.
Alex Beene, a professor of financial literacy at the University of Tennessee at Martin, stresses the importance of balancing attracting new residents and employers with the need to maintain sufficient income to fund the state’s growth. Beene warns that the reduction in tax revenues could force the state to look for new sources of revenue in the future.