Council is considering a proposal to overhaul how income is taxed in South Carolina. The proposal aims to simplify the state’s tax system by spreading tax rates more evenly across different income levels.
Currently, South Carolina has a tiered tax system, with tax rates ranging from 0% to 7% based on income brackets. The proposal suggests consolidating this system into a flat tax rate of 4.85% for all income levels. This change would simplify the tax structure and potentially reduce the burden on lower-income residents.
In addition to the flat tax rate, the proposal includes a few key provisions. One such provision is an increase in the state’s standard deduction from $12,550 to $15,000 for individuals and $25,100 to $30,000 for married couples. This adjustment would allow more taxpayers to benefit from deductions without having to itemize their expenses.
The proposal also includes an expansion of the tax brackets for taxable income. Currently, South Carolina has six tax brackets, but the proposal suggests increasing this to eight brackets. This would provide more granularity in tax rates and potentially create a fairer system for taxpayers across different income levels.
Overall, the proposed changes aim to make South Carolina’s tax system more equitable and easier to navigate. While some critics argue that a flat tax rate may disproportionately impact low-income households, proponents believe that the increase in standard deductions and expanded tax brackets will help alleviate this concern.
The debate over the proposed changes is ongoing, with stakeholders on both sides voicing their opinions. As the State Council continues to deliberate on the proposal, South Carolina residents and businesses are encouraged to stay informed and provide feedback on how these changes may impact them.
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