Sunday, June 19, 2005
should be on front burner
SC Statehouse Report
19, 2005 - - Almost as constant as the rising sun every morning,
people complain about paying taxes.
It's easy to do. But without taxes, we wouldn't be able to
live in a civilized society. As much as people hate taxes,
they provide the foundation that civilizes America. By paying
taxes, we provide funds for government to provide needed services,
such as military protection, garbage pickup, road construction,
schools and more. By having taxes fund services, we share
the burden to get a better quality of life.
Imagine, for example, if you had to pay a toll for every
road that was built. It would drive you more nuts than the
few cents extra you pay at the pump for roads.
Beyond the constant political rhetoric about taxes, it's
time for the state to take a long look at modernizing our
tax system. Over the summer, lawmakers are planning big pow-wows
on the property tax. But instead of a small fix here or a
minor tweak there, lawmakers need to look at equity and fairness
to make sure the whole structure is as balanced as possible.
As Columbia economist Harry Miley relates, if you try to
tweak one tax, it likely will have unforeseen consequences
on the other taxes. It's kind of like poking a finger in balloon,
he says. The more you poke it, the more it will expand in
another direction. If you poke it too much, it will burst.
"There's no tax that's perfect," Miley says. "The
only reason we have taxes is we have no other way to provide
the public services we all demand. That's why most economists
say if you start tinkering with one tax, you've got to look
at all of them."
Currently, our tax structure is antiquated. It's built on
three major foundations - - taxes on the sale of goods, taxes
on income and taxes on property. A growing fourth foundation
is the use of fees for services provided.
Taxing property has been the most enduring way for government
to generate revenues. As states provided more services, they
looked to broaden taxation. Income tax didn't really get started
in earnest across the country until after 1913 when a national
income tax was approved with the 16th Amendment. Across the
South, sales taxes didn't become a big deal until the 1950s
when they were passed mostly to improve education.
In other words, we're operating in the 21st century with
a system of taxation that stretches back for generations.
The last big update was almost 50 years ago.
As they tinker with property taxes, lawmakers should recall:
WORLD: A little tsunami
TRACK: Right on Sanford election
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Sales tax. Over the last 50 years, the country has
changed from an economy based on sales of goods into a computer-driven
economy that has an increasing mix of services. According
to a 1997 report, South Carolina only taxes 32 of 164 services.
And since the 1970s, the sales tax rate has increased 49 percent
across the nation, but the sales tax base has increased only
20 percent, which indicates a shrinking base.
Meanwhile, the state has more than 60 sales tax exemptions
that cause it to lose $1 billion a year in revenue. Also,
it's losing up to $395 million a year in sales taxes on Internet
and catalog sales.
Income tax. The state offers six income brackets for
income tax. The top bracket is $12,000, which means that almost
everyone pays income taxes at the top bracket. The brackets
haven't been altered in years. If lawmakers stretched brackets
some, income tax would become more progressive (to balance
the regressive nature of sales taxes). Additionally, by adding
a new top bracket with a slightly higher rate, they could
generate some new revenue and broaden the state tax base -
- or give credits to low-income earners to make the system
Other taxes. To generate more revenue - - or to decrease
reliance on income and sales taxes - - lawmakers also could
consider updating the cigarette tax to the national average,
which would bring in more than $150 million a year to fund
things like school improvements and health care increases.
They could consider hiking the gas tax, which could pay for
much-needed maintenance on state highways. They also could
consider means-testing some tax breaks for seniors to level
the taxpayer playing field.
Bottom line: There are lots of options to make the system
fairer and more balanced. As lawmakers talk about property
taxes this summer, they should also consider limiting sales
tax exemptions, dealing with lost taxes from online and catalog
sales and broadening the sales tax base to include more services.
Additionally, they should consider revising income tax brackets
to make them less flat and more connected to reality.
6/19: A little
Another great cartoon from Bill McLemore:
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6/13: Minibottles won't go away
To the editor:
Your reference this week to mini-bottles (Commentary,
6/5) probably is aimed toward a speculation that free-pour
will quickly outdistance mini-bottles. I have conducted a
consumers' survey that suggests quite the opposite, although
the end result will mostly be based on pricing (from the liquor
stores and the wholesalers, including delivery charges) and
If, say a minibottle bar keeps its pricing as it is, while,
as expected, the free-pour bar sells the customer less liquor
at the same old price as the mini-bottles', it is quite possible
that the mini-bottles will not die a sudden death. I also
hear that some smaller bar owners in particular will keep
mini-bottles because they are easier to count for inventory
than the vagaries of the free-pour bottle.
And it costs $30,000 to install a drink gun system that would
measure out the liquor and the mix in free-pour, so that the
possibility of underpouring or of subbing bad liquor into
good bottles becomes a matter of constant investigation by
SLED. I'm not sure at all that free-pour will come in like
a lion, but may well go out like a lamb.
-- Jerry C. Ausband, Garden City Beach, S.C.
Here's some other recent feedback to Statehouse Report:
deserts the governor, Rose
Condon, Charleston, S.C.
on doctors is bad legislation, Stephen A Imbeau,
MD, Florence, S.C.
is wrong for SC, Sandy Gibson, Lexington, SC
doesn't care for Average Joes, Sandy Gibson, Lexington,
with what passes as a Republican, Janet Upshaw,
on Sanford is liberal hogwash, Lew Richards, Manning,
on Sanford election
This section tracks past forecasts by Statehouse Report
with other media reports:
In Statehouse Report:
more vulnerable than you think:
"Unless the Democrats
do the work to make themselves competitive, it's a good
bet that Sanford will win re-election in November 2006."
In The State:
Sanford will be tough to beat. "Whoever
wins the partys nomination next June will face
a difficult task trying to unseat Republican Gov. Mark
SOUTH CAROLINA SCORECARD
Here's a "thumbs up" and "thumbs down" related to various
political events from the past week:
Cooper. Kudos to Rep. Dan Cooper, R-Anderson, the
new chair of the House Ways and Means Committee. Let's hope
he brings more sunshine into the budget process. More.
Fair. Thumbs down to Sen. Mike Fair, R-Greenville,
for continuing to push the teaching of creationism in the
Highways. The state has the highest number of speed-related
traffic deaths....Doesn't this tell us we need to do more
about our highways .. and dieways?
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