Our weekly Top Five feature offers big stories or views from the past week with policy and legislative implications.
How state tax policies can start reducing inequality, Elizabeth McNichol for the Center on Budget and Policy Priorities, Dec. 15, 2016
This analysis looks at how there’s been a growth in tax inequality over the years with moderate- to low-income families shouldering a larger burden of taxable income. In South Carolina, the top 1 percent of households have seen a 93 percent increase in income since 1979, while all other households has seen income drop 3 percent, the study shows.
To reverse the trend, states should ask more of high-income earners, the author argues, with strategies like these (several of which have been covered in the past by Statehouse Report):
- “Make their income taxes more effective at reducing inequality through steps such as levying higher rates on high-income taxpayers or capping itemized deductions.
- “Establish or expand taxes on inherited wealth, such as estate taxes.
- “Strengthen taxes on corporations, such as by eliminating costly tax breaks — which enable many profitable corporations to pay zero state income taxes in some states where they do business — and establishing strong minimum taxes or adopting “combined reporting” (a reform that nullifies three of the most common state corporate tax shelters).
- “Broaden the sales tax base to include more services purchased by wealthy individuals.
- “Boost incomes among low- and moderate-wage working families by enacting state earned income tax credits.
- “Maintain an overall tax system that raises sufficient revenue to pay for the building blocks of shared prosperity, such as education and access to health care.”
2. Obamacare enrollment continues to increase in S.C., The Post and Courier, Dec. 22, 2016
Despite the state of South Carolina refusing to expand Medicaid to help more than 200,000 people get health insurance through the Affordable Care Act, the state has added 147,000 residents to health insurance roles since Nov. 1, according to this story.
“Meanwhile, a new report published this week by the Commonwealth Fund shows the percentage of South Carolinians without health insurance dropped from 23 percent in 2013 to 16 percent last year. The drop was even more dramatic among black and Hispanic patients. The uninsured rate within those groups dropped by 9 percentage points in three years.”
3. How a rural transformation fund could help S.C., Union Daily Times, Dec. 17, 2016
This story highlights how half of the state could get “life-changing support” through a new kind of fund that would augment its normal tax base. An excerpt:
“The fund, which was proposed by [Union County ] Supervisor Frank Hart, would help South Carolina’s smallest counties deal with the problem of a lack of population and the problems associated with it through yearly allocations of state funding ranging from $300,000 to $1 million.”
4. Eyeing statewide business licenses, The State, Dec. 17, 2016
This story looks at how uniform, statewide business licenses could be beneficial to small businesses, large businesses and local governments.
5. How republics end, Paul Krugman in The New York Times, Dec. 19, 2016
Award-winning writer Paul Krugman draws parallels to what’s happening in the United States to what happened in Rome centuries ago. An excerpt of this interesting read:
“Lately I’ve been reading a lot about the ancient world. Initially, I have to admit, I was doing it for entertainment and as a refuge from news that gets worse with each passing day. But I couldn’t help noticing the contemporary resonances of some Roman history — specifically, the tale of how the Roman Republic fell.
“Here’s what I learned: Republican institutions don’t protect against tyranny when powerful people start defying political norms. And tyranny, when it comes, can flourish even while maintaining a republican facade.
We Can Do Better, South Carolina!