South Carolina’s income tax structure is antiquated. As salaries rise with inflation, the increased take-home income
drives workers into higher marginal rates of taxation. This occurs even if a workers real disposable income and
purchasing power remain steady. Such a system means that South Carolina workers are being subjected to built-in
tax hikes as their wages rise in response to inflation. Over the course of decades, this has made South Carolina a
high-tax state. Because the vast majority of earners are being taxed in the highest bracket their burden is among the
heaviest in the South. This is evident when we compare the actual income tax rate of similarly situated taxpayers in
neighboring states.
By South Carolina Policy Council
Since 1986 the South Carolina Policy Council Education Foundation has advocated innovative policy ideas that advance the principles of limited government and free enterprise. The Policy Council is the state’s meeting place for business leaders, policymakers, and academics – as well as engaged citizens – who want to see South Carolina become the most free state in the nation. For questions or comments on the articles on this website, please email Research Director Jamie Murguia.
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