State jobs bill would end corporate income tax
The state House on Thursday approved a massive bill that eliminates the corporate income tax and provides a wide array of incentives in an effort to spur job creation.
Eliminating the tax will cost the state about $170 million a year when it is completely phased out in 10 years. The phase-out would begin in two years, while the other elements would go into effect when the bill becomes law.
The House approved the bill by a 105-9 vote.
Rep. Keith Kelly, R-Woodruff, said the Legislature had to get aggressive in order to put South Carolinians back to work. The state’s unemployment rate was 12.6 percent in December.
“We’ve got to try everything we can,” Kelly said. “South Carolina families are hurting. Any time you lessen the tax burden on businesses you invite businesses to the table, and that helps with job creation.”
The bill makes it easier for large corporations to access incentives and provides tax credits for small businesses.
Some Democrats, however, questioned the wisdom of eliminating a revenue stream in the middle of an ever-worsening budget crunch. Lawmakers are trying to combat a shortfall of more than $500 million this year, and they are looking at a $1 billion hole next year.
Rep. Joe Neal, D-Hopkins, said the state already is having difficulty providing for the basic needs of its residents — as evidenced by a $46 million cut at the Department of Disabilities and Special Needs that could eliminate services for about 26,000 disabled residents. Passing the jobs bill “escalates that,” he said.
“We can roll the dice, hoping we hit a lucky seven and businesses will come rushing to our borders,” Neal said.
“And if they don’t, then we’ve cut hundreds of millions of dollars from the budget,” he said.
Rep. Harold Mitchell, D-Spartanburg, said he voted for the bill even though he had reservations about eliminating a revenue source.
“It comes down to jobs,” Mitchell said. “We’ve got to do something to turn things around.”
The bill also extends a fee-in-lieu-of-taxes agreement with Duke Power in Cherokee County, said Rep. Lanny Littlejohn, R-Pacolet.
“We’ve got a dire situation with jobs in this state,” Littlejohn said. “This is going to spur the economy. We’ve got to do this. We can’t just sit back and do nothing.”
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