SCGOP Raises Taxes on Its Lowest Income Earners While Delivering Major Cuts to the Wealthy
- Javar Juarez
- 24 hours ago
- 4 min read
By Javar Juarez | CUBNSC | SC Statehouse
Columbia, S.C. - South Carolina Republicans (SCGOP) have spent years campaigning on a simple promise: eliminate the state income tax and give relief to working families. But the numbers behind H.4216, the Republican-backed tax overhaul moving through the State House, tell a different story. The official fiscal analysis from the South Carolina legislature shows that while the bill reduces taxes overall, it also raises taxes on hundreds of thousands of South Carolinians, including many lower-income households, while delivering some of the largest benefits to the wealthiest earners in the state.
The math behind the bill is what lawmakers call a net tax cut, but that label hides a serious reality. According to the legislature’s own fiscal impact statement, the bill will reduce total individual income tax liability by about $308.7 million in tax year 2026. At first glance, that sounds like broad relief.
But the details show something else entirely.
Under the proposal, 42.8 percent of tax returns would see a decrease, totaling about $522.1 million in tax reductions. At the same time, 22.6 percent of tax returns would actually see their taxes increase, adding roughly $213.4 million in new tax liability. Another 34.6 percent would see no change at all.
In real terms, that means 624,092 South Carolina taxpayers would pay more under the bill, while 1,179,002 taxpayers would pay less.
This is how a tax plan can be sold as a “cut” even while a large number of people see their bills go up. The statewide total goes down, but many families pay more.
The Structural Shift
H.4216 does not simply lower tax rates. It rewrites the structure of the tax code.
The bill lowers the state income tax rate to 1.99 percent on income up to $30,000 and 5.21 percent on income above $30,000. But at the same time, it eliminates the federal standard deduction and federal itemized deductions that South Carolinians currently rely on.
In their place, lawmakers created a new deduction called the South Carolina Income Adjusted Deduction (SCIAD).
That deduction is capped at:
$15,000 for single filers
$22,500 for heads of household
$30,000 for married couples filing jointly
It also phases out entirely as income rises, disappearing between:
$40,000 and $95,000 for single filers
$60,000 and $142,500 for heads of household
$80,000 and $190,000 for married couples
For many households, losing the federal deductions while receiving a smaller or phased-out state deduction results in higher taxable income, even though the tax rate itself is lower.
Working Families Paying More
The legislature’s distribution table reveals how uneven the impact will be.
In the $20,001 to $30,000 income range, 32.4 percent of taxpayers will pay more under the bill.
In the $100,001 to $150,000 income range, 30.5 percent will pay more.
For families already struggling with rising housing costs, healthcare bills, and grocery prices, even modest increases matter. The fiscal analysis shows the average increase in the $20,001 to $30,000 range is about $39, while those in the $100,001 to $150,000 range could see average increases of about $357 among those affected.
For households living paycheck to paycheck, that is not a rounding error. That is money taken directly from rent, groceries, childcare, and transportation.
SCGOP Raises Taxes: Meanwhile, Millionaires Cash In
While working families face increases, the biggest gains go to the top of the income ladder.
According to the state’s fiscal analysis, 72.8 percent of taxpayers earning over $1 million will receive a tax cut under H.4216.
The average cut among those high-income filers receiving a reduction is about $10,060.
That means the same legislation that raises taxes for many working South Carolinians delivers five-figure tax cuts to millionaires.
The Promise vs. The Reality
Republicans have long campaigned on eliminating the state income tax altogether. But H.4216 does not eliminate the tax. Instead, it sets up a conditional system for future reductions, tied to revenue growth thresholds.
Future rate reductions could occur only if state income tax revenues grow by at least five percent and fiscal conditions allow it. In other words, the elimination of the tax is not guaranteed and not immediate.
The promise remains political. The reality remains conditional.
The Real Issue
What makes this debate serious is not just the politics. It is the distribution of economic pressure in a state where many households are already financially strained.
When lawmakers say a tax plan cuts taxes overall, they are speaking about aggregate numbers, not individual families. A statewide total does not help a single mother whose tax bill goes up. It does not help a small business owner whose deductions disappear. It does not help a worker whose paycheck is already stretched thin.
The fiscal tables behind H.4216 show clearly that South Carolina’s tax overhaul shifts the burden in uneven ways, delivering large benefits to many high earners while still raising taxes on a substantial number of lower and middle-income residents.
That is not a messaging issue. It is written directly into the math of the bill.
And for the 624,092 South Carolinians who would pay more, the promise of tax relief will feel like something else entirely.
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