There are several reasons we trail most states, beginning with our continuing struggle with the remnants of the recession. We’ve made solid gains, but our unemployment rate is still nearly a percentage point higher than the national average, which means South Carolinians have less income on which to pay taxes and less income to spend on taxable goods.
In addition, our state relies far too heavily on the sales tax, and the Legislature by both its actions (creating more loopholes) and its inaction (refusing to tax services) has steadily eroded the tax base. Today only 35 percent of goods and services sold in South Carolina are taxed; that’s down from 48 percent in 2000.