Posted on Tue, Dec. 26, 2006


S.C. offering $1.7 billion in tax breaks


The Associated Press

S.C. government is offering $1.7 billion in tax breaks, but critics say a comprehensive review of the state's tax system could give relief to more people, spur job growth and simplify what one taxpayer group calls a "lobbyist's full-time employment act."

The breaks come from a variety of sources - such as the well-publicized statewide property tax reform, decrease in the sales tax on food and the discount on the sales tax for an artificial joint lubricant.

Legislators are touting the $1.7 billion total to show they are committed to cutting taxes.

"We are serious about tax relief in this General Assembly, contrary to comments from others on a regular basis," said House Speaker Bobby Harrell, R-Charleston.

Critics say many of the tax cuts are too narrow and create a confusing tax system that requires experts to navigate.

"It's basically a lobbyist's full-time employment act," said Don Weaver, president of the S.C. Association of Taxpayers.

Weaver's group wants to see a panel appointed to review the state's tax system, then require lawmakers to reject or accept the changes as a whole.

Otherwise, lawmakers would try to pick and choose reforms while being lobbied by the same special interests that supported some of the proposals that have made the tax system so confusing, Weaver said.

The General Assembly already has received a report from the Palmetto Institute. The think tank dedicated to improving South Carolina's business climate and quality of life advocated a complete review of South Carolina's tax code to update it, make it fairer and more efficient, and encourage business investment.

However, lawmakers have done little with institute recommendations issued a year ago.

Also Gov. Mark Sanford has backed off calls for a tax overhaul, opting instead for ideas he said target the state's most important needs, such as raising the cigarette tax to pay partially for an income tax reduction.

"I think the idea of a comprehensive tax review makes sense," Sanford said, referring to the Palmetto Institute report.

But, he added, "Let's not let that get in the way" of other reforms.

John Rainey, chairman of the state Board of Economic Advisors, also supports a tax overhaul.

"We're nickel and diming ourselves to death when we don't have an overall plan," Rainey said.

"Why would there be tax relief on an arthritis drug and not on a cholesterol drug? Why would there be tax relief on either one of them?"





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