The Tax Reform That Isn’t: South Carolina’s H.4216 Hikes Taxes on the Middle Class

South Carolina lawmakers are pitching House Bill 4216 as a bold new vision for tax fairness. They say it’s a simplification of the tax code. They say it’s a win for working families. But when you look past the headlines, one thing becomes clear: H.4216 is not tax relief—it’s a middle-class tax hike disguised as reform.

Sold as a move toward a flat 3.99% income tax rate, the bill actually increases taxes for roughly 60% of South Carolinians—especially those earning under $74,000 as single filers or $116,000 as joint filers. A key reason is the bill’s elimination of the state deduction for federal income taxes paid—one of the most significant protections currently available to middle-income earners. By removing this deduction, H.4216 broadens the taxable income base, resulting in higher effective tax bills for the majority. Meanwhile, the wealthiest 20% of earners reap the biggest rewards, as they benefit from the lower flat rate without feeling the brunt of lost deductions.

This isn’t economic freedom. It’s a top-down scheme that shifts the tax burden away from the political elite and onto the shoulders of South Carolina’s working families.

The Numbers Don’t Lie—But Politicians Might

Supporters of H.4216 argue the bill is “revenue neutral.” But let’s break that down. If the state isn’t collecting less money overall, and the top earners are paying less, then someone else has to make up the difference—and that someone is you. They’re essentially using sleight of hand to move funds around and make this appear to be a tax cut while increasing taxes for roughly 60% of South Carolinians.

By eliminating deductions and expanding the taxable income base, the legislature has found a clever way to extract more money from taxpayers—without ever increasing the headline rate. This is a revenue grab cloaked in reformist language, and voters should see it for what it is.

Voices of Dissent from Inside the House

Even lawmakers within the State House are sounding the alarm. Representative Josiah Magnuson was unequivocal in his criticism of the bill:

“The headline sounds appetizing that the legislature might reduce state income tax to a 3.99% rate. I would love to support this. But every way you slice it, it’s actually going to be a tax hike on the majority of South Carolinians. The supposed ‘tax cut’ is just another bait-and-switch from the fake Republican leadership in Columbia.”

It’s a sentiment shared by fellow Representative and Liberty Rep. Sarita Edgerton, who blasted the bill’s architects for their elitist detachment from real life in South Carolina:

“The people pushing this bill are the same ones who show up to campaign events in designer loafers, sipping cocktails at the club, while real working families are struggling to afford gas and groceries. True tax cuts are tax cuts for ALL—not just the top 20%… South Carolinians are tired of being lied to. No more country club schemes. No more tax hikes disguised as reform.”

These are not fringe voices—they’re principled conservatives standing up against a bill that violates the core values of limited government, fiscal responsibility, and economic liberty.

Tax Cuts for the Few, Tax Burden for the Many

This bill is the worst caricature of country club politics. It offers lip service to working families while handing real benefits to the donor class. It protects the status quo in Columbia—where politicians grow the budget by 10% in the same breath they tell you they’re cutting taxes.

Speaker Murrell Smith has openly admitted that preserving state revenue was the priority in crafting this bill. “We wanted to make sure we preserved the integrity of our budget,” he told The State. And that’s exactly what they’ve done—preserved their power, their funding, and their agenda, at your expense.

What Real Reform Would Look Like

If South Carolina were serious about empowering working families and limiting government overreach, it wouldn’t be tinkering with the margins of a broken system—it would be pursuing full repeal of the state income tax. That’s exactly what House Bill 3125 seeks to do. Introduced earlier this session, H.3125 proposes a complete elimination of South Carolina’s individual income tax, offering a bold, pro-growth alternative to incremental changes that shift burdens without shrinking government. This bill is sponsored by liberty legislators Thomas Beach, Rob Harris, Jordan Pace, Josiah Magnuson, Stephen Frank, Sarita Edgerton, Jackie Terribile, Joe White, and Jay Kilmartin who are fighting for real income tax reform in South Carolina.