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Article published Jan 19, 2005
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Lawmakers must take a more comprehensive approach to tax relief
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South Carolina lawmakers must get away from their piecemeal
approach to tax relief and look at the state's entire tax structure.Their
tactics have led to an inequitable and cumbersome tax system. And at least one
new bill shows they plan to continue the same pattern.Last year, the General
Assembly tried to give relief to homeowners who face big increases in their tax
bills after a reassessment. They passed a bill capping such increases at 20
percent. But the governor correctly vetoed the bill, pointing out that it would
allow some property owners to pay taxes on less than the fair market value of
their homes while others paid on the full value of their homes. It would shift
the tax burden away from the wealthy owners of waterfront property, which
appreciates rapidly, to other homeowners.The bill was typical of the tax relief
measures that have come from the General Assembly.The legislature passed
homeowners' property tax relief, which was supposed to give each homeowner a
$100,000 exemption from school taxes. But lawmakers then corrupted the system by
redistributing the money. Now some homeowners get more while others get less,
depending on where they live. And the legislature has found it difficult to come
up with the money to fund the relief each year.Lawmakers passed measures to
reduce vehicle property taxes a few years ago, but those measures just shifted
the burden from vehicles to homes and businesses, further concentrating the tax
burden on real property owners.Now that lawmakers' reassessment cap has been
vetoed, they are considering a new bill that would allow reassessment of
residential property only when a home is sold.This plan is even worse than the
first. Only those homes that were recently purchased would be taxed at fair
market value. The tax burden would be shifted to those who recently moved.The
South Carolina Chamber of Commerce is urging lawmakers to take a look at the
state's complete tax system, and that's exactly what is needed.Lawmakers should
look at the mix of income, property and sales taxes and the way it funds state
and local governments. Meaningful reform will come from a restructuring of the
whole tax system, not from piecemeal fixes that have adverse impacts on
unforeseen elements of the tax structure.Lawmakers should design a new tax
system that takes some of the burden off property owners, more equally
distributing the tax burden.