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Way back in August 2010, South Carolina Governor Nikki Haley called for repeal of her state's corporate income tax. I blogged about this issue at the time. I pointed out that the state corporate tax was an inefficient and ineffective way to raise revenue, but that I was not sure South Carolina could afford the cost of repeal. There were no serious legislative proposals to repeal the tax last year. But the Governor has said that she wants to try again. She still needs to replace the $219 million the tax raises. But why not repeal the tax? It is an awful way to raise revenue. It pales in comparison to either the personal income or sales tax; each of which raises over $2 billion a year in South Carolina. A corporation with a breathing accountant can reduce its tax liability to almost zero. Articulate a rationale for the tax or get rid of it.But articulating a rationale for the state corporate income is difficult. Do we tax corporate income because we need the money? It does not raise a lot of money....
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