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SC gov proposes tax cuts, despite budget shortage

South Carolina's already facing a budget deficit of more than $500 million, so this doesn't seem like the most logical time to start pushing tax cuts. But Governor Mark Sanford thinks more businesses would set up shop in the state and create new jobs if they paid lower taxes. He is proposing South Carolina phase out its corporate income tax over the next 10 years. On the individual front, Governor Sanford wants to give people the option of paying the current 7-percent income tax, with all of the existing deductions and exemptions - OR paying a flat income tax rate of 3.65 percent without any deductions. All told, Sanford's proposed tax cuts will cost the state about $107 million, which he plans to offset - in part - by raising the state's cigarette tax 30-cents per pack. South Carolina's per-pack tax is the lowest in the nation - 7-cents. Efforts to raise the cigarette tax in South Carolina have been unsuccessful in the past. The South Carolina legislature will consider Sanford's proposal when they convene in January.