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South Carolina's 6% top rate is high for the southeast, and it is reached at a very low threshold — meaning the graduated structure gives limited relief to middle earners. Someone on $60,000 and someone on $200,000 face the same marginal rate.

What rebalances it is the standard deduction, set at $8,350 for single filers and $16,700 for married couples, alongside a zero-rate band on the first tranche of taxable income. Together these shelter a meaningful amount of pay, so the effective rate for a typical worker lands well under 6% even though the marginal rate does not.

South Carolina has been reducing its top rate through a revenue-triggered schedule, down from 7% a few years ago. Further reductions are legislated subject to revenue conditions, so the rate has drifted downward each year and is likely to continue.

South Carolina does not tax Social Security benefits at all. On top of that it offers a retirement income deduction for taxpayers aged 65 and over, and a separate, unusually generous exemption for military retirement pay, which is fully deductible regardless of age.

Those provisions, combined with low property taxes for owner-occupiers, are much of why South Carolina consistently ranks among the most popular destinations for retirees moving from the northeast. The income tax rate looks unremarkable on paper; the retirement treatment is what does the work.

For working-age employees, South Carolina builds on federal taxable income concepts, so pre-tax 401(k) contributions and Section 125 health premiums reduce state tax as well as federal.

No South Carolina city or county levies an income tax. Charleston, Columbia, Greenville and Myrtle Beach withhold only the state rate.

South Carolina's property tax system is unusual and heavily favours owner-occupiers. Primary residences are assessed at 4% of market value while second homes and rental properties are assessed at 6% — a fifty percent difference in the assessment ratio, before any millage is applied. The result is very low effective property tax rates for residents and substantially higher ones for investors and holiday-home owners.

Sales tax is 6% at state level with local options adding up to around 3%, which is moderate for the region. Overall the state's burden sits in the lower half nationally, with the caveat that its income tax reaches its top rate unusually early.