Originally created 05/25/04

Sanford cites need for income tax cut



AIKEN - South Carolina Gov. Mark Sanford used the front steps of an Aiken feed store as a pedestal Monday, urging the state Senate to vote on his income tax reduction plan today or tomorrow to give the bill a chance to pass before the General Assembly adjourns June 3.

Aiken Sen. Greg Ryberg, a close Republican ally of the governor, joined Mr. Sanford at the Aiken County Farm Supply store. He said the Senate's 27 GOP members would put the bill over the top but that Democrats are threatening to block the income tax cut with a filibuster.

"Our intent is to break it," Mr. Ryberg said during a relaxed news conference with about a dozen listeners who sat in the shade to avoid intense heat. "I think the people (of South Carolina) deserve a vote on this issue."

After touring the feed and seed store on Park Avenue with Mr. Ryberg and owner Pace Kneece, Mr. Sanford touted the benefits of rolling back the state's income tax from 7 to 4.75 percent.

Peeling back the tax, which would occur only after the state brought in $200 million in new revenue, would spark economic growth and spur small businesses to hire more workers, he said.

"These kinds of small businesses are the real backbone of job creation in our state," Mr. Sanford said outside the Aiken store.

Democratic state Sen. Tommy Moore, of Clearwater, said he would listen to the proposal but preferred his own plan to lower income tax rates for small businesses from 7 percent to 5 percent. Mr. Moore also said his plan would eliminate income taxes altogether for people who make less than $15,000.

"I've listened to this 'We'll grow the economy' before," said Mr. Moore, whose own plan died in the Senate last year.

Mr. Sanford illustrated his point with a graphic displaying net employment growth and small business creation in Florida, which has no income tax, Georgia, which has a 6 percent income tax, and North Carolina, which has a 7 percent levy like South Carolina.

From 1998 to 2002, Florida had a net gain of 35,438 businesses, and saw a 10 percent jump in net employment, according to statistics from the U.S. Small Business Association and U.S. Bureau of Labor Statistics.

Although they have a similar tax rate to South Carolina, net job growth went up 6 percent in Georgia and North Carolina, while South Carolina's dropped by 2 percent. Mr. Sanford attributed Georgia's growth to Atlanta, saying job growth was stagnant outside the metro hub.

North Carolina's 7 percent income tax rate, he pointed out, doesn't kick in until a person makes at least $120,000, which takes the burden off lower-wage earners.

South Carolina, which lost a net of 3,627 small businesses, applies its 7 percent tax to everyone making more than $12,000, leaving people "flipping burgers and fries" paying a white collar rate.

Reach Josh Gelinas at (803)279-6895 or josh.gelinas@augustachronicle.com.