By Andy Brack, editor and publisher | The biggest Christmas gift that the state legislature can give the people of South Carolina is comprehensive tax reform.
It’s far past time to do something reasonable with South Carolina’s convoluted tax structure. Under the current system, our sales tax is sky-high and a competitive barrier for business. Our income tax has become essentially flat with about half of South Carolinians paying little or nothing. Our property taxes are a mess, penalizing commercial property owners and renters.
As a state, we need billions to shore up our roads, bridges and dams. We need billions to fix a neglected, mismanaged pension system and we need billions to bring forgotten, rural schools up to snuff to compete in the 21st century.
Folks, we just have to deal with roads, pensions and schools. South Carolina can’t keep kicking the can down the road.
To do the job correctly, lawmakers need to stop nonsensical talk that tax reform has to be “revenue neutral.” Hogwash. That’s just a political buzz phrase that really means legislators want to shift things around a little without having an impact on the protected class. Most of the time, these shifts hurt the poor and working class by forcing them to pick up more of the burden.
South Carolina needs money to deal with decades of neglect. Through real, comprehensive tax reform, we can ease the tax burden and make it fairer. If we cut a third of the more than $3 billion in sales tax exemptions to special interests, we’ll generate $1 billion more in revenues. We can use some of it to cut a penny from a sales tax, giving tax relief to all. We can use more to balance the inequities in dumb property tax reform from a few years ago that is hurting commercial property owners. And we can take the remainder and invest in better schools.
For roads, we need to grow up and pass a long-overdue gas tax increase, which will put about a third of the burden on visitors to our state. For the pension system, a great start would for the state to be realistic in the investment returns that it expects instead of pie-in-the-sky dreams of 7 percent or more.
Comprehensive tax reform is just one continuing need highlighted in each issue of Statehouse Report through its Palmetto Priorities. In 2009, Statehouse Report outlined 11 broad policy objectives to help guide state lawmakers on strategies to help people in the state. If you don’t have a policy map, we opined, you’ll flounder year after year. That’s just what’s happened.
Since 2009, we knocked one priority off the list – raising the tax on cigarettes – even though lawmakers only did half the job with a 50-cent-per-pack boost. Then we merged two tax proposals into one, and added one on poverty. This year, we’re knocking off another priority – to increase voter registration to 75 percent by 2020. Hurrah! Two down. Now there are nine to go:
POVERTY. Develop a broad-based anti-poverty agenda by 2020 that includes the jobs, education and health care components below to help lift the almost one in five South Carolinians in poverty into better conditions.
JOBS. Approve a Cabinet-level post by 2020 to add and retain 10,000 small business jobs per year. Politicians talk about helping small businesses. This would force them to.
EDUCATION. Cut the state’s dropout rate in half by 2020.
HEALTH CARE. Ensure affordable and accessible health care that optimizes preventive care for every South Carolinian by 2020. With a Trump White House ahead, it’s unclear how Obamacare will be impacted, but more people need to be on health insurance, not less.
ENVIRONMENT. Adopt a real state energy policy that requires energy producers to generate 20 percent of their energy from renewable sources by 2020.
TAXES. Overhaul and stabilize the tax structure by 2018 through reforms that broaden the tax base and lower rates. This should include reimplementation of reasonable property taxes and removal of hundreds of millions of dollars of special-interest sales tax exemptions.
CORRECTIONS. Cut the prison population by 25 percent by 2020 through creative alternative sentencing programs for non-violent offenders.
ROADS. Develop and implement a plan in 2017 that creatively taps several sources to generate an extra $1 billion every year for investment in the state’s crumbling system of roads and bridges.
POLITICS. Have a vigorous two- or multi-party political system of governance.
With these issues in mind, is there anything big that we’re missing?
Have a comment? Send it to: feedback@statehousereport.com.
We Can Do Better, South Carolina!
Right on! Inflation ate away muscle of fuel excise tax by 53.8% – Ten gallons of fuel produced $1.50 for SCDOT when the law was last set in 1996. Today it produces $0.98 of asphalt or labor for that work. SCDOT has hundreds of miles of roadway to maintain than it had in 1996 – same excise tax rates – doing more with less is a recipe for the crisis of today.
The sickness is politicians believing the public is so ignorant they are unable to understand THERE IS NO SUCH THING AS A FREE ROAD.
And so the next step in stupidity and deception will be the tolling and PublicPRIVATEPartnership scams that make great money at great taxpayer expense.
Thanks Andy. Our roads and bridges are crumbling and our mobility is severely hampered. This not only affects our quality of life but also the movement of goods and services.
Increasing the gas tax is a simple and broad based solution. In addition it should be indexed so we don’t have to address this issue again.
The gas tax should be raised so that every person that uses our roads will help to pay for the roads. People from around the world and from other states will be helping pay for the roads every time they pay for gas in SC instead of SC taxpayers shouldering the full burden.
The tax should be raised with one condition….there should be an income tax rebate for SC taxpayers. This will offset the gasoline tax for South Carolinian’s since there will more available money for our roads once the gas tax is raised.