Dear Friends:
Over the past 15 years, I have never started my legislative update with news headlines, but an exceptional moment deserves special treatment!
For the Aiken Standard, it was also front-page news.
SC SLASHING TAXES!
The historic income tax cut for South Carolinians was unveiled this week at a State House news conference. Led by Speaker Murrell Smith, Budget Chairman Bruce Bannister, and members of the Republican House Caucus, a bill was introduced to cut the state’s top income tax rate by nearly 40%. You read that correctly—almost 40%!
A few years ago, the state’s top income tax rate was 7%. We passed
legislation to reduce the 7% rate to 6% over several years. The rate is currently 6.2%. This new bill targets a flat tax of 3.99% and includes triggers to go lower to 2.49% over time—and eventually to ZERO! This monumental shift in state tax policy will allow South Carolinians to keep more of their hard-earned money.
Lowering the state’s income tax will increase economic growth. Citizens will keep more of their earnings, increasing consumer spending, job creation, and business expansion.
Details of the Tax Cut Legislation
- Historic Tax Reform: South Carolina’s current top income tax rate of 6.2% is the highest in the Southeast — and it’s time for that to change.
- Flatter, simpler system: This plan replaces our progressive income tax with a single flat rate of 3.99%, immediately making South Carolina more competitive than North Carolina (4.25%) and Georgia (5.39%).
- No Burden on Low-Income Filers: A $6,000 exemption that begins to phase out at $30,000 of income and fully phases out at $40,000.
- Special Tax Exemptions Remain: Previously enacted exemptions for those earning military retirement or Social Security benefits will have those benefits remain tax-free.
- Other Key Exemptions: The bill retains the $9,000 deduction for taxpayers who file as head of a household and a $12,000 deduction for those who file as married filing jointly or as a surviving spouse.
- Future cuts on the horizon: The plan continues cutting the rate from 3.99% to 2.49% as economic conditions are met — putting South Carolina on track to have the lowest income tax rate in the entire nation.
- No shifting burden: These are real tax cuts — not by shifting the burden to higher sales or property taxes.
- Take back control from Washington: By flipping from federal taxable income (FTI) to gross income, we stop being handcuffed to federal tax policy decisions that don’t fit South Carolina’s unique needs. This puts South Carolina — not Washington — in the driver’s seat.
- Bigger paychecks: This historic tax cut for most South Carolinians means you will have more monthly money in your pocket.
- Keeping sales tax exemptions: Zero taxes on groceries and medicine remain in place.
- Fulfilling Republican’s Pillars of Progress Agenda: This plan is the first step in the House Republican Caucus’s bold two-year strategy to deliver historic tax cuts and fuel sustainable growth for South Carolina.
According to the state’s Revenue and Fiscal Affairs Office, 44% of tax returns filed in 2023 had no tax obligations, while the wealthiest 10% of filers are currently responsible for 63% of the state’s total tax liability.
Beast of the Southeast
This legislation would make SC among the nation’s friendliest tax states for all income filers. SC would have lower income tax rates than neighboring Georgia and North Carolina when enacted. SC is truly the ‘Beast of the Southeast!’
What’s Next?
The House Ways & Means Tax Subcommittee, on which I serve, expects to hold a public hearing on the legislation next Tuesday, April 1 (and that’s not an April Fool’s joke). The bill (H.4216) has 65 Representatives as cosponsors and the support of Senate leadership and Governor McMaster. That unified front means the legislation is on speed drive, so it can be passed during the next 21 legislative days in this year’s session and be signed into law to take effect in tax year 2026.
Securing SC’s Monuments & History
Sen. Danny Verdin and I teamed up to protect SC’s history. This week, during a news conference, we announced filing two bills (H.4260) (S.508) to protect all memorials on public property in SC by expanding on the Heritage Act passed in 2000 to keep monuments in place. That law gives the Legislature sole authority over whether to remove or change the name of any building or memorial on public property commemorating American wars and Native American or African American history.
In recent years, some cities, towns, and school boards have removed memorials without permission. This bill strengthens the Heritage Act by withholding state financial support to those who violate the law. It also allows private organizations to file lawsuits to block the removal of monuments without authorization. (SC Daily Gazette: SC legislators seek to expand Heritage Act protections to all public memorials) (Post & Courier: SC lawmakers taking steps to further protect monuments)
Tort Reform Passes Senate!
After four weeks of contentious debate, SC Senators passed legislation (S.244) late Wednesday that changes the rules on personal injury lawsuits in SC. They hope this will drive down insurance rates, which are skyrocketing and forcing some businesses to close.
The vote was 35-7. Three Democrats joined Republicans in passing it, and all seven “no” votes came from Democrats.
Under existing law, a business that plays any role in someone’s injury or death can be forced to pay the entirety of court-awarded damages. In this proposed legislation, all damages would be doled out proportionally — unless the business is primarily at fault.
It would work this way. If a business is deemed 20% responsible, it must pay 20% of the verdict’s total award. If a business is more than 50% responsible, it can be held fully liable for economic damage, such as medical expenses, lost wages, and property damage. It would still pay proportionally for emotional and punitive damages — essentially, the jury’s award for punishing those at fault.
The wide-ranging bill also cuts in half the mandated insurance coverage for bars and restaurants that serve alcohol.
This vote is a massive victory for businesses and a defeat for trial lawyers. The battle now moves to the House, where we expect the barrage of emails, texts, and mailers to be sent to our constituents.
New SC National Guard Commander
The Senate unanimously confirmed Brigadier General Rob Stilwell as the new Adjutant General for the SC National Guard. Governor Henry McMaster appointed him, and he takes on the role of the state’s top military officer. He succeeds General Van McCarty, who officially retired this week. I had the opportunity to become well acquainted with BG Stilwell when he joined our legislative delegation for our February trip to the Texas border to visit our SC National Guard troops deployed there for a year. BG Stilwell is a well-experienced, outstanding leader.
PHOTO OF THE WEEK
