The SC House Tax Policy Review Committee on Thursday heard from Gov. Henry McMaster, who applauded the committee for its work and then introduced special guest speaker economist Dr. Art Laffer.
Laffer is the founder and Chairman of Laffer Associates, an economic research and consulting firm in Nashville, Tennessee, that provides global investment-research services. He is best known as President Ronald Reagan’s chief economist and earned the nickname “The Father of Supply-Side Economics” due to his economic insight and influence that triggered a worldwide tax-cutting movement in the 1980s.
Laffer told the committee that South Carolina is poised for a huge take-off in prosperity, but only if it can flatten and simplify the state’s archaic tax structure. He encouraged the committee to work toward a plan that collects taxes in the least damaging manner, spends taxes in the most beneficial manner and stops when the trade-offs end.
Following his remarks, the committee discussed ways to find consensus among the members to send a bill to the House Ways and Means Committee for continued debate. The committee will have two plans drafted in bill form to discuss at next week’s meeting.
- One plan will be to lower the state’s income tax rate from 7% to 4.5% funded by state growth and includes a trigger mechanism in the event of decreasing tax revenues to the state.
- The other plan will be to lower sales taxes by removing most sales tax exemptions and include taxing some services.
Committee Chairman Tommy Pope (R-York) has told the committee his goal is to get the bills adopted by the committee and introduced in the House as soon as possible. Once introduced, it will be assigned to the Ways and Means Tax Subcommittee, where the tax subcommittee will begin debate and taking testimony.
This 14-member ad hoc committee was created in 2016 by Speaker of the House Jay Lucas and is responsible for reviewing South Carolina’s current tax code and submitting suggestions for reform to the Speaker.
The SC House Tax Policy Review Committee’s meeting agenda and video archives dating to August 2016 can be found at https://www.scstatehouse.gov/CommitteeInfo/HouseTaxPolicyReviewCommittee/SCHouseTaxPolicyReviewCommittee.php.