News+Opinion » D. A. Smith

THE WANDERING EYE ‌ Numbers, Numbers, Numbers

Shooting at fish in a barrel... and missing



The Eye has been bemusedly watching the machinations of the General Assembly and the governor's office since the legislative session began at the beginning of January.

So far, both parties have accomplished little with Gov. Mark Sanford distinguishing himself with a mostly lame and rambling State of the State Address two weeks ago.

The big focus has been on property tax reform, as it's been the hot-button issue ever since everybody received their tax bills and started jumping around like a bunch of mad hens.

The Senate is presenting this Cliff's Notes solution: eliminate public school taxes from owner-occupied homes and automobiles, reduce the sales tax on groceries, and replace those monies with revenue generated by increasing the South Carolina sales tax from 5 percent to 7 percent. Also included is an income tax rebate to renters to make up for the higher taxes that would be charged to rental property.

Schools would receive property taxes from businesses, rental property, and second homes. Cities and counties would continue to be funded the same way they are now, and the state would make up any gaps in school funding.

The House would also boost the sales tax to 7 percent and reduce sales tax on groceries. This plan would use the monies generated by the increased sales tax to eliminate school, county, and city taxes on owner-occupied homes. Schools, cities, and counties would still get money from property taxes on business, rental property, automobiles, and second homes with the state making up any shortfalls.

Both plans would set caps on local governments' ability to increase property tax rates.

It sounds pretty simple on the face of it, but The Eye will be happy to remind everyone out there that there is no such thing as simple when it comes to matters of public finance.

The problem with both plans is that they benefit some South Carolinians at the expense of most South Carolinians.

That's just the moral issue of the impact a sales tax has on the poor — what proponents fail to realize is that these plans will both fail to generate adequate funding for the state over time. The property tax base is simply expanding more rapidly than the sales tax base is.

How can a regressive sales tax stimulate economic growth when the burden hits business owners, especially small business owners, disproportionately?

How can state legislators from the biggest counties in the state such as Florence, Charleston, and Greenville decide what's best for nowhere lands like Williamsburg County? And how will these proposals help the nowhere lands grow?

What about the schools?

It seems to The Eye that the only thing pushing the current plans along is the burning desire of legislators to get reelected. There's no original thinking in either of the plans other than shutting some people up.

Why aren't more services taxed? The wealthy, who pay 3.7 percent of their income on the current sales tax incarnation, spend more on services than the poor.

With all those self-described "good Christians" up in the Statehouse, one would think their focus would be on helping the poor and providing a better education for South Carolinians.

Perhaps that's the real problem: legislators don't have common goals for all South Carolinians.

If they sat down and developed some, maybe then they'll come up with a tax plan that ticks everybody off rather than just some demographic groups.

If no one is happy, then that tax plan might be the right one for the Palmetto State.

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