State Individual Income Tax Comparisons for 2012

Abstract

This report compares the South Carolina income tax system to the other forty states for three major categories. First, we analyze our taxpayers’ distribution of income relative to other states. We then compare actual state income tax collections to federal AGI to calculate an average effective tax rate for each state. This measure of taxpayer burden indicates that South Carolina’s 2.99% average effective individual income tax rate ranks the state thirty-second. Finally, we compare the average effective tax rate rankings to standard per capita and percentage of income measures of income tax burden. Our findings, consistent with previous reports, suggest that South Carolina taxpayers have lower income compared to other states based on federal AGI comparisons and have a relatively low state income tax burden, the tenth lowest of the forty-one states for tax year 2012.