You'd be hard pressed to find many examples of an "evil to the core" hobbit in the books. We're given the impression that Smeagol had a great capacity for evil even before the lure of the ring but i don't think he's portrayed as someone who is "evil incarnate", his story evokes pity, his was a pathetic existance. Also, it all depends on how we define evil for ourselves. If hobbits weren't capable of evil then i don't think they would feel the effects of the ring, but that's a whole other discussion having to do with the nature of the ring.
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