A day after Gov. Nikki Haley renewed her call to eliminate South Carolina's income tax, her Democratic challenger's campaign said it was little more than an election year gimmick because she doesn't specify how the money would be replaced.
Both Haley and Democratic gubernatorial hopeful and state Sen. Vincent Sheheen have tax reform as a major plank, according to their campaign websites, but the two would take different approaches.
Haley favors eliminating the state income tax, a position she outlined during a Monday speech in the Upstate.
"We have got to -got to - eliminate the state income tax," she said, according to the Anderson Independent. "It is so, so important to bringing jobs and investment to the state."
But Sheheen's spokesman Andrew Whalen called her remarks "little more than Nikki Haley's latest attempt to distract from the ongoing scandals at her Department of Social Services, the misleading statistics her administration has given to the public, and her utter failure of leadership at the agency."
Whalen noted that Haley offered no plan for how she plans to replace the funds that would be lost, and she made no mention of it in her annual budget this year.
Haley's proposed budget this year called for eliminating the state's 6 percent income tax bracket, which would have cost almost $27 million in revenue. Lawmakers have not approved it.
A spokesman for Haley took umbrage with the Sheehan campaign's characterization of her election-year tactics. "The governor was responding to a question from a member of the audience, so nothing the Sheheen campaign is saying makes any sense," said Rob Godfrey. "That said, we're happy to have a conversation about tax policy: Gov. Haley wants to cut taxes to keep our economy moving, but Vince Sheheen wants to raise them so he can pay for big government programs like ObamaCare."
Haley's call for eliminating the state's income tax did receive praise from Americans for Prosperity South Carolina state director Dave Schwartz, who said, "Gov. Haley hit the nail on the head. ... Recent studies have shown that eliminating the income tax would create more jobs and allow workers to keep more of their hard-earned paycheck."
He pointed to an American Legislative Exchange Council study based on federal data that showed nine states with no income tax outperformed the U.S. average in population growth, economic growth, employment and even tax revenue.
The state income tax brings in about half of the state government's general fund, and talk of tax reform has been a topic in Columbia for years.
Eliminating the state income tax also is featured prominently on Haley's re-election website. Sheheen instead calls for fixing the income tax by adjusting income tax brackets for the 21st century, enacting a refundable earned income tax credit for low-income residents and eliminating loopholes for special interests and corporations.
Sheheen's tax reform plans also would replace local school property taxes with a statewide property tax, eliminate certain sales tax loopholes and lower the state's industrial property tax rate.
"Politicians in Columbia have jumbled our tax code into a giant mess littered with special interest loopholes," his website says. "The result is an unfair, dysfunctional system that is an obstacle to economic growth and penalizes hardworking South Carolinians for the benefit of a few."
Reach Robert Behre at 937-5771.
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