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Statehouse: Haley pitches 'flatter' state income tax

By Jackie R. Broach
Coastal Observer

Gov. Nikki Haley’s four-step plan to cut tax rates isn’t getting the support she wants from the legislature, so this week she went to voters for help.

“This is a call to action,” she told a group gathered outside Garden City Realty on Monday. “It is time for the people to get loud and use the power of your voice and say this is my money not your money.”

For her plan to work she needs the legislature to put $140 million from the $6 billion state budget into a tax relief trust fund. The budget was under discussion on the House floor as she spoke.

Haley was rallying voters to contact legislators and pressure them to put the funds aside.

The stop at the realty office, where Lee Hewitt, a Murrells inlet resident and an early supporter of Haley, is broker in charge, was the second on her “Tax Relief Tour.”

Putting the $140 million aside will mean some hard decisions on the part of lawmakers, but “none of this is intended to be easy,” Haley said. “Ask Lee, with his business, what he’s got to do. He’s got to prioritize and make hard decisions. Ask any of the taxpayers here. We all have to make hard decisions.”

Haley’s plan would phase out the corporate income tax over a four-year period; consolidate six individual income tax brackets into three, leaving the state with a “flatter, fairer tax;” amend the Constitution to establish property tax rates by statute; and require that the Board of Economic Advisors to the Department of Revenue publish biennial reports on the number of beneficiaries of each tax credit, deduction and exception, along with the impact on the state treasury.

“My number one job for you as governor is jobs, jobs, jobs,” Haley said. “I am desperately trying to bring jobs to this state and I am desperately trying to maintain the business we already have.”

In her recruiting efforts, “there’s not a conversation I have with a CEO that doesn’t talk about our tax structure,” she said. Tax reform would be an important tool in helping bring and keep business for South Carolina.

The four-year phase out of the corporate income tax would start on Jan. 1, 2013, with a reduction in the tax rate from 5 percent to 3.75 percent, according to Haley’s plan. That would save businesses $61.6 million in the first year, which she predicted they would reinvest in jobs and infrastructure.

Hewitt stepped in the spotlight briefly to offer a local perspective, talking about the 350 people Garden City Realty employs during the peak of the season and what having extra money in their pockets would mean to them and their families.

He also talked about the benefits to the state’s coastal communities even when businesses locate in other areas of the state. Owners and employees of those businesses would be potential beach vacationers and second homeowners, he said.

“The bottom line is the money is best in your pocket, not the legislature’s,” Haley said.

Her words found a receptive audience.

“The truth is anything is better than what we have,” said Stephen Goldfinch of Murrells Inlet, a Republican seeking election to state House District 108. “I’m a supporter of the Fair Tax ... but what she’s proposing is an idea that will retain if not grow the economy, and retain if not grow the businesses that are here now.”

Marla Hamby, a Pawleys Island area resident, said she will heed Haley’s call to action.

“I believe that we need to start contacting our legislators. We need to start calling and e-mailing and writing letters to all of them,” she said. “We need to put the heat on them. That’s the only way to make them do anything.”

She planned to get started right away, she added.

“I won’t call it harassing them, but I will be very, very motivated. Being persistent pays off.”

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