Democrats Response to Gov. Haley’s Roads Plan

Democratic legislators say Gov. Nikki Haley’s plan to cut income taxes by $9 billion over the next decade is nothing but a tax hike for more than a million South Carolinians.

House and Senate Democrats urged Haley on Thursday to stop holding infrastructure funding hostage to a proposal they say primarily benefits the wealthy and forces cuts in needed government services, without sufficiently addressing the state’s infrastructure needs.

Haley announced last month she’s willing to support increasing the gas tax by 10 cents over three years to pay for road and bridge work, but only if legislators cut income taxes by 2 percentage points over 10 years.

That would reduce revenue by $1.8 billion yearly once fully implemented, according to the state Revenue and Fiscal Affairs Office.

The office’s economic advisers project that 1.1 million people who file income tax returns — or 46 percent of filers — would see no benefit because they would pay no personal income taxes anyway, due to previous cuts to the bottom brackets.

Democrats note those taxpayers would, however, pay the gas increase.

“One million people will only see a tax increase,” said Rep. James Smith, D-Columbia.

In promoting her plan, Haley touts the average tax cut reaches $689 in 2025. But Democrats say the average masks that the biggest beneficiaries by far are millionaires.

According to economic advisers, about 380 filers who report a taxable income of at least $2 million would each see a $146,000 tax reduction in personal income taxes in 2025. Those reporting between $1 million and $2 million would see a $40,000 reduction.

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