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Politics and tax mischief

Published: Sunday, February 12, 2006 - 6:00 am


State senators should put an end to the House's plans to undermine home rule and a stable tax system.

With little thought to the consequences of their actions, House lawmakers on Wednesday approved two radical property tax measures that are grossly unfair and could further erode the state's economic competitiveness. Election-year and special-interest politics appear to be the prime motivation behind the tax mischief.

Both proposals also seek to undermine local governmental control and have understandably sparked strong opposition from cities, counties, school districts and businesses. State senators should put a stop to the House's ill-considered plans.

One proposal would do away with most property taxes on owner-occupied homes in exchange for a 2-cent-per-dollar increase in the state sales tax. The other would change homeowner property assessments from every five years to the time the property is sold.

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The first plan would shift the burden of taxes from affluent homeowners to those who own more modest homes. Those most likely to be hurt by the plan include the poor, renters, mobile home owners, seniors and the disabled. They're likely to benefit very little or not at all from a property tax cut, but they're going to be hit hard by an increase in the regressive sales tax.

Poorer South Carolinians spend a greater percentage of their money on necessities. It would help little that lawmakers also plan to cut the tax on groceries.

The plan also would shift more of the tax burden to businesses and make South Carolina economically less competitive with neighboring states.

Eliminating most property taxes would put state lawmakers in the business of dividing up revenue to send back to Greenville and other counties. That would diminish home rule, impeding the ability of local governments to provide lifesaving essentials such as police, fire protection and emergency medical services. Schools would have little leeway to respond to the needs of the community if funding was controlled from Columbia rather than by local school boards. It also could force local governments to raise already high user fees.

The second plan, reassessing property for tax purposes only at the time of sale, would create an inherent unfairness in property taxes. Property taxes in neighborhoods could vary dramatically from house to house -- based merely on how long the home had been occupied. It would be particularly unconscionable to penalize struggling young families buying their first home.

South Carolina's tax structure is notable for its balance -- evenly divided between income tax, sales tax and property tax. Property taxes also are more stable than sales taxes, which tend to fluctuate with the economy.

Lawmakers want to swap the current system for one that's unfair and less stable. No other state in the nation has so dramatically altered its property tax structure.

The state Senate has a reputation for being a more deliberative and less politically motivated body than the House. Senators could consider ways to relieve the tax burden for poorer South Carolinians without undermining home rule and the state's relatively fair and stable tax system.