COLUMBIA, SC (WCSC/AP) – South Carolina’s Senate Finance Committee is gearing up to work on the state’s budget with a big question to answer: How will it pay for the $2 billion in cuts and income tax refunds offered?
The committee will work this week on the state’s nearly $14 billion spending plan for the next fiscal year. They are expected to include much of what was in the House spending plan.
But the House plan earmarked $600 million just for income tax cuts, while the Senate plan includes $2 billion for deeper income tax cuts and a rebate for all. those who file a tax return.
Under current South Carolina taxes, taxpayers pay an income tax range of zero to 7%, depending on their taxable income, according to SmartAsset.com. The current state tax structure includes a total of six tax rates.
The House plan, passed in February, would reduce the number of tax brackets to just three. Those earning less than $3,200 would pay no state income tax, while incomes of $3,200 to $16,040 would be taxed at a rate of 3%. Income over $16,040 would then be taxed at the rate of 6.5%.
The Senate plan, however, goes further, reducing the top tax rate to 5.7% and also adding rebates.
As noted, people who pay $100 or less in state income taxes, including those who pay nothing, would receive a $100 rebate. Those who pay between $101 and $700 would receive a refund similar to what they pay in income tax over the course of a year. Rebates would be capped at $700, so anyone who pays more than that amount would still receive $700 back.
The South Carolina House, meanwhile, will be on spring break this week.
Speaker Jay Lucas is continuing his tradition of allowing the chamber to have a week off before Easter. This year, the House also took a week off in March after Lucas said members had worked hard and passed enough bills.
Members of the House passed a flurry of bills last week just before a key deadline that may make it harder to pass laws. There will be 12 days left in the regular session of the General Assembly when the House returns on April 19.
Copyright 2022 WCSC. The Associated Press contributed to this report. All rights reserved.