(The Center Square) — While South Carolina is well-positioned to weather a possible recession, one leading political watcher in the state doesn’t want lawmakers to fall into the trap of raising taxes to try and improve its fiscal position.
Candace Carroll, state director for the Americans for Prosperity-South Carolina, told The Center Square that state lawmakers should look at tax rates and not fall into the trap of wanting to raise the income tax rate.
How would you consider the State of the State for South Carolina from an economic standpoint?
South Carolina, fortunately, had a very strong economic opportunity last year, and I would even say before that. ...We closed for a very short period [for the COVID-19 pandemic], but then after that, the governor reopened and allowed the businesses to flourish, he had a very solid rainy-day fund; there was an opportunity to really give money back to taxpayers last year — $1 billion that went back into taxpayers’ pockets. ...Lawmakers leaned into an opportunity last year to look at a tax cut program to take our top tax rate from 7% down to 6.5%.
Are there certain areas or specific legislation that lawmakers focus on or push?
I would love for them to take a look at the corporate net income tax. We have the highest corporate net income tax in the southeast. And so, you see a lot of businesses going to North Carolina and going to Georgia, and I would love for us to be able to, one, attract some of those businesses here, but two, keep businesses that we do have [from] wanting to leave and go to other states. …I think right now, it’s at 5%, and we’d love to see that lower. Also, there are a lot of occupational licensing barriers similar to other states that I would love to take a look at.
How do you think the state is set up if we are in a recession or heading toward one?
I actually think that we’re in a very solid spot economically as a state because when you take a look at the state budget last year, ...lawmakers and the governor set aside money that [they didn’t need] to fund what’s currently going on in the state [and placed it] into a state reserve program. So, I think that we’re actually in a really good spot in that regard. And we have pretty [fiscally minded lawmakers] on both sides of things that want to rein in a lot of the earmarked funding that they do, one, but also making sure that our core functions of government are actually funded. …Should we hit a recession, I do think that South Carolina will be in a good spot. But I would want to make sure that we don’t then turn to taxing folks more.