COLUMBIA, S.C. — South Carolina Republicans have proposed a plan to raise income taxes for 60% of filers in 2026 as part of a strategy to establish a flat tax rate, according to the Associated Press.
The proposal aims to reduce the state’s top income tax rate from 6.2% to 3.99% next year, with the eventual goal of reaching a flat rate of 2.49%. Supporters argue that this will result in long-term benefits, with three out of four taxpayers paying less than they do now.
Republican Rep. Brandon Newton described the plan as a “conservative revolution” in tax policy, emphasizing fairness and simplicity. “We should have a simple tax system that is flat, fair and that everyone takes part in,” Newton said.
Democratic Rep. Gilda Cobb-Hunter expressed concerns about the initial tax increase on 60% of the state’s residents, particularly the middle class. “I am real nervous about what we are going to find out later went into paying for this tax cut,” Cobb-Hunter said.
The legislation proposing the tax changes advanced to the House Ways and Means Committee on Tuesday, with the goal of passing through the House next week and moving to the Senate.
Republican Gov. Henry McMaster supports the initiative, advocating for a “broad, flat, simple-to-understand low tax” system where everyone contributes “a little something.”
The plan is part of a broader trend among Southern states to lower taxes, with Georgia and Kentucky considering smaller income tax reductions funded by economic growth, while Mississippi plans to eliminate its state income tax over a decade.
The South Carolina Revenue and Fiscal Affairs Office released an analysis indicating that taxpayers in income bands ranging from $10,000 to $150,000 would pay more initially, with average increases between $300 and $800.
Newton emphasized that once economic growth triggers the reduction to a 2.49% flat tax rate, nearly four out of five taxpayers would pay less.
The proposal reflects South Carolina Republicans’ efforts to compete with neighboring states in tax policy, but it has sparked debate over its impact on middle-class taxpayers and the timeline for achieving the desired flat tax rate.
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