Small business could use a hand but will individuals benefit?

January 16, 2005

Gov. Mark Sanford may have seen more of his agenda accomplished in the first few days of the new legislative session than in all of 2004.

First came approval of the Senate rules change. The governor believes much of his priority list didn’t come to fruition because of filibusters and the method of placing unrelated — and sometimes unpalatable — additions within legislation to make a vote for the legislation seem not in anyone’s best interests.

At any rate, much of his agenda since taking office, indeed, even during his campaign for the governor’s seat, rested upon a proposal to lower and eventually do away with income taxes in South Carolina. Mr. Sanford maintains a lower income tax rate will not only benefit taxpayers but will encourage wealthy retirees to relocate to our state. The business climate will also be more welcoming, he has repeatedly stated, if the top rate of 7 percent is, beginning in 2006, lowered to 4.75 percent.

A subcommittee agreed, and sent the proposal to the House Ways and Means Committee for consideration.

Opponents say the legislation primarily helps those who make in excess of $100,000, which isn’t exactly your average South Carolina working individual. But many would admit to make the business climate more attractive, particularly in giving breaks to small business, isn’t such a bad idea. Small business does, after all, make up for more than 95 percent of all our state’s businesses.

We agree to aid existing small businesses would be a plus and eventually aid the economy overall. In addition, we believe to give those small businesses tax credits for such actions as providing insurance for their employees or on-the-job training and the like, would help not just the business’s bottom line but aid the worker as well.

Yet it’s hard to ever believe that a tax cut really is a tax cut. Remember, if you will, the last "tax cut" we were given — the incremental decrease in our state vehicle tax — and the subsequent passing on of those losses to local governments. That in turn impacted the local taxpayer and property owner. After all, our state is not in such a prime economic state that a tax cut can be implemented without a corresponding increase in revenue somewhere else. Last year, this same proposal carried a provision that called for an increase in the state sales tax.

In addition, we believe and have said on several occasions in the past that we don’t believe a business considering a move to our state, or those "wealthy retirees" for that matter, would be enamored of bringing bag and baggage and health care needs to a state that was having continual difficulties funding quality of life issues.

We appreciate that the governor is taking steps to bring more business to South Carolina, to help our economy grow and to, in the end, benefit the individuals he is elected to serve. But we just don’t believe reducing our income tax rate — already one of the nation’s lowest — will help the average citizen as he attempts to buy a home or pay his bills or send his children to college.

Tax cuts are a fine thing; we’d all like to see more of them. But they simply are not the most practical move in tough economic times. Our economy is still struggling. Just last week, another closing put almost 1,400 Upstate residents out of work.

Still, it is early in the year and early in the session. We’ll keep an open mind. But we’d like our folks in Columbia to do the same.

For whether Columbia is willing to admit it, times won’t improve for all of us if just a few of us benefit from cuts that may be more painful than profitable when simply replaced by other drains on our earnings.

Copyright 2005, Anderson Independent Mail. All Rights Reserved.