Comparing TRAC and FairTax

There has been a lot of discussion about the tax changes being proposed by the appointed Tax Realignment Commission (TRAC), which included adding taxes on electricity and water while repealing sales tax exemptions on groceries and medicine.

State Rep. Leon Stavinakis (D-Charleston) recently called in to the Rocky D show and expressed his opposition to the initial TRAC recommendations.

Then Rocky asked him if he supports the South Carolina FairTax Act. He said he doesn’t because it would add a tax on legal and accounting services and repeal sales tax exemptions.

Rep. Stavrinakis is correct on that point, but he doesn’t take into consideration that the bill eliminates the state income tax. Lawyers like Rep. Stavrinakis could charge a lower fee if they didn’t have a state income tax burden. They would also be able to purchase business-related equipment such as computers and furniture tax-free.

The South Carolina FairTax Act also includes a monthly prebate which covers sales tax costs for the essentials. A legal resident family of 4 would receive a monthly prebate of $164, which would pay all the sales tax they would pay on $2400 in monthly spending on new retail goods and services.

The most powerful feature of the South Carolina FairTax Act is that it will empower consumers to increase their take-home pay and put it back into the economy, while giving existing businesses the added capital to expand and hire.
Eliminating the state income tax also would make South Carolina an attractive place for entrepreneurs and wealthy retirees around the county. That would boost home sales and employment!

With federal income taxes scheduled to increase Jan. 1, South Carolina needs to eliminate its 7% state income tax to have any prospects of restoring prosperity and putting people back to work!