Lawmakers should look to tax restructuring rather than arbitrary caps

South Carolina lawmakers should give up their goal of providing property tax relief by establishing caps on reassessments.

Both the governor and the Supreme Court have thrown out these caps. The truth is that they are inherently unfair and would transfer much of the property tax burden from wealthy homeowners to poorer homeowners and businesses.

To give them some credit, lawmakers were trying to respond to taxpayer frustration surrounding rising property taxes. But instead of dealing effectively with the source of the problem, the General Assembly went for the quick fix. As they have so many times regarding the state's tax system, lawmakers are treating the symptoms rather than the disease.

And as is the case with so many of their tax-relief measures, they make the problem worse rather than better.

They passed a law that allows counties to impose a cap on property reassessments so that homeowners don't get hit with doubled bills when their property is revalued.

The idea sounds good, but its application is a problem. It would apply to large homes that appreciate quickly, particularly waterfront homes. Because reassessment on these homes would be capped, the wealthy homeowners who live in them would end up paying taxes on much less than the market value of their homes.

Meanwhile, poorer homeowners living in houses that don't appreciate as rapidly would be paying taxes on the full market value of their homes. Counties and cities would make up for the lost revenue by raising the tax rate. And the net effect would be to shift the tax burden to lower-income homeowners.

The state Supreme Court struck down this law because it eliminates statewide uniformity in tax law. Gov. Mark Sanford vetoed a bill last year that would have established a statewide cap, citing the unfair nature of such a cap. But some lawmakers are still considering new versions of the legislation.

They should drop the idea and all other quick-fix tax measures. It is the past 10 years of piecemeal tax reform that has made the state's system unfair and has caused taxpayer frustration.

Lawmakers should undertake a complete review and restructuring of the tax system to make it more simple, more equitable and less of a burden on

homeowners.

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