Proposed Flat Tax Affects Smokers Dramatically|ABC News 4

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Proposed Flat Tax Affects Smokers Dramatically

posted 2:59 pm Wed December 19, 2007 - Columbia, SC

tags: flat tax • fair tax • economy • mark sanford

The flat tax has been touted as a means to an end for those who believe tax brackets based on income are unfair. The office of Governor Mark Sanford released the proposed first step toward a flat tax Wednesday – cutting the top marginal income tax rate from 7 percent to 3.4 percent.

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Sanford says the difference will be made up by raising the tax on cigarettes 30 cents per pack.

"This is about beginning a long-overdue conversation in South Carolina about the way we tax and about the need to simplify our tax structure," Sanford said. "To that end, we're making this proposal as a way of starting that conversation and as a way to take a meaningful step in that direction."

South Carolina’s tax rate is the highest in the region at 7 percent. Sanford’s proposal would put the state in line with other southeastern states.

According to a recent study from the Atlanta Federal Reserve Board, "Relative marginal tax rates have a statistically significant negative relationship with relative state growth." Based on this study’s findings, Sanford proposes a lower sales tax will promote economic growth in the state.

While most will benefit by the flat tax, smokers would argue their benefits, however Sanford says hiking up the price on cigarettes will make the state healthier.

“We think this plan has a host of benefits when it comes to improving the quality of life for thousands of South Carolinians by impacting the cost of smoking, and therefore the rate of smoking," he said.

If the Executive Budget is approved, South Carolinians will have a choice to pay the flat tax of 3.4 percent without current tax deductions or the previous 7 percent with tax deductions in the year 2009.

Latest Comment on Proposed Flat Tax Affects Smokers Dramatically

PaulN

7:24 pm on 12/19/07

I think that the priorities are correct here. There should be an income tax cut, and the price of tobacco should be raised to make up for it. 30 cents a pack is not exorbitant. Many states have much higher tobacco taxes that we have here in South Carolina. If a few people quit, or a few kids don't start smoking because of it, then we save on medical expenses that are considerably higher among smokers.

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