A bill that would give everyone who files an income tax return in South Carolina a rebate of at least $100 is speeding its way through the state Senate.
The Senate Finance Committee on Tuesday unanimously passed the $2 billion bill, which includes a significant cut in the top income tax rate.
The proposal now heads to the Senate floor, where Republican leaders want to get a vote so senators can consider the bill's impact alongside the rest of the $14 billion state budget next month.
The sometimes long-winded Senate Finance Committee debated the bill for less than 20 minutes. It was proposed 19 days ago,
The proposal cuts the state's top income tax rate from 7% to 5.7%, costing just under $1 billion. The other $1 billion in the bill gives a rebate ranging from $100 to $700 to every person or married couple who files an income tax return regardless of whether they ended up paying any state income tax.
Supporters said the 44% of filers who don't make enough to pay state income tax — about 1.1 million total — deserve to get a $100 rebate because they do pay sales tax, which also helped pump a $4.5 billion windfall into the state's bank accounts.
For taxpayers who do pay income tax, the rebate would essentially give them back what they paid for a year with a cap at $700. About 39% of taxpayers pay more than $700. About 18% would get back about exactly what they pay.
The full House has already passed its own cut which reduces the top tax rate from 7% to 6.5% next year and keeps cutting to 6% over five years. It also collapses all other tax brackets to the lowest group at 3%, costing about $600 million in the first year, and $1 billion when fully implemented.
The two sides will eventually have to work out their differences.
Through the committee process in both the House and Senate and in the full House, there hasn't been a single vote against the bill.
"We're all tea party now," joked Democratic Sen. Darrell Jackson of Hopkins after the unanimous vote Tuesday in the Senate Finance Committee.
"Welcome to the party," Republican Senate Finance Committee Chairman Harvey Peeler of Gaffney said. "Big tent."