News+Opinion » Will Moredock

Mark Sanford wants to cut their income taxes

Friend of the Rich

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A few weeks ago I was on a panel with a couple of other local know-it-alls, discussing the significance of the recent election and what we might look for in the next four to eight years. As frequently happens in the waning minutes of panel discussions, questions and answers started drifting far afield of the original topic.

A woman raised her hand to ask, "How long will it take South Carolina to catch up with the rest of the country in economic and social development?"

I told her I had been waiting 58 years and wasn't holding my breath. The line was good for a laugh, but of course it spoke only a small fraction of the truth. I'm sure that in 1908 people were asking when South Carolina would finally arrive in the 20th century and they went to their graves wondering.

We have been electing bad leaders in this state for generations. It's as much a part of our history and culture as iced tea and going to church on Sunday. Why does South Carolina lag behind the rest of the nation? The answer is simple: because we keep electing men like Gov. Mark Sanford.

Sanford's latest nod to 19th-century thinking was his proposal last week to overhaul the state's income tax structure, creating a flat tax. A flat tax is the holy grail of Republican politicians and policy-makers. It is the strychnine-laced Kool-Aid, which conservatives have been trying to get America to drink since the Reagan years. The Kool-Aid, in this case, is a simplified tax code, with all deductions and loopholes eliminated. The strychnine, well, that's a tax structure that simply won't fund a modern government with its myriad services and responsibilities.

That's why progressive governments have progressive tax structures, setting higher rates for higher income levels. The most progressive governments in the world — Scandinavia and a handful of Western European nations — have the most progressive tax structures. They also have the lowest rates of poverty and highest standards of living, along with such concomitant benefits as low levels of violence, illiteracy, and teen pregnancy.

Governments with highly regressive tax structures — like the banana republics of Latin America and the southern states of the U.S. — tend to have high levels of poverty, illiteracy, and violence, as well as repressive political and social institutions. Sound familiar?

Why is South Carolina so economically and socially undeveloped? You know at least part of the reason: a tax structure that is designed to keep wealth in the hands of the wealthy at the expense of public institutions and infrastructure which benefit society as a whole. Now Mark Sanford wants to tip the economic table even more in favor of the rich.

The Post and Courier wasted no time in calling Sanford's hand on this flat tax boondoggle. Four days after the governor announced his plan, the P&C ran a story saying, "More than half of the families in South Carolina would not save a dime under the flat tax plan proposed by Gov. Mark Sanford, but income tax savings for the wealthy would be substantial..."

Tax savings would not kick in until the $65,000 level for a family of four. That family would save exactly $1, according to the P&C analysis. If you are lucky enough to make $250,000 a year, you could save $6,178 under the Sanford tax plan. Where do you fit on that scale?

Incredibly, Sanford justifies this tax break for the wealthy by saying it would attract business and promote development. Yet South Carolina has long had one of the most regressive tax structures in the nation. If lowering taxes on the rich is the magic bullet to stimulate growth, why has it never worked before?

Creating good public education and infrastructure is the way most civilized states and countries encourage development. But education and infrastructure cost money — money Sanford is not willing to spend if it means raising taxes.

To pay for his income tax cut, Sanford called for a 30-cent-per-pack tax increase on cigarettes. But business and public policy leaders have long called for a tax hike on cigarettes to pay for health care for the state's large uninsured population. Sanford has been opposed to using a cigarette tax to pay for health care for the needy, but he is happy to use it to pay for a tax break for the wealthy.

Anywhere else in the world this would be an outrage. In South Carolina, it's business as usual. It's earned Sanford two terms as governor and — if my hunch is correct — will earn him a run for the White House. And it explains why this woebegone little state always has two wheels in the ditch.

Check out Will Moredock's blog at thegoodfight.ccpblogs.com.

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