While South Carolina Hands Out Corporate Tax Breaks, It Cuts Aid To Low-Income Families And The Unemployed

I noted earlier that South Carolina’s state House gave in to a temper tantrum thrown by online retailer Amazon, granting the company an exemption from collecting sales tax, in addition to “a free site to build [its new South Carolina] facility, property tax breaks on equipment, [and] job tax credits from the state.” The South Carolina state Senate, meanwhile, is cooking up a budget that includes $100 million in corporate tax breaks.

At the same time that it is serving up all these corporate goodies, South Carolina is moving to cut aid to two of its most vulnerable groups of residents: low-income families and the unemployed. Already, the state has reduced its benefits under the Temporary Assistance for Needy Families (TANF) program by 20 percent to $216 per month, which is just 14 percent of the poverty line. And as The Huffington Post’s Arthur Delaney reported, South Carolina is also looking at cutting its unemployment insurance system:

The South Carolina State Senate gave preliminary approval last week to a bill that would reduce state unemployment benefits from 26 weeks to 20 weeks while simultaneously cutting unemployment surtaxes for businesses. In recent months Michigan and Missouri cut benefits to 20 weeks, and Florida and Arkansas have slashed aid as well. Those reductions served as models for South Carolina, where the idea to decrease the number of benefits popped up in the last few weeks.

As Heather Boushey and Danielle Lazarowitz pointed out, cuts to jobless benefits can stifle economic growth and increase poverty. In fact, the Center on Budget and Policy Priorities released a good chart today (based off of this study) showing that public programs, including TANF and unemployment benefits, successfully keep millions of people out of poverty:


However, government expenditures have recently shifted “away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased.” South Carolina, if all of the ideas being proposed become law, will certainly not help reverse that trend.