Posted on Tue, Oct. 26, 2004


Vote ‘yes’ to take farm tax provision out of constitution



ONE OF THE HALLMARKS of South Carolina’s constitution is that it is packed with detailed provisions better suited to statutory law than to such a binding document. The result, from time to time, is that questions on obscure topics show up on the election ballot.

This coming Tuesday will be one of those times.

Currently, individuals and corporations with 10 or fewer shareholders pay a third less in taxes on agricultural property than what is charged on other undeveloped land. Some legislators think the break should be extended to companies with as many as 75 shareholders, because that’s a generally accepted threshold between small companies and what we usually think of as “corporations.”

But the 10-shareholder limit is one of those items that is written into the state constitution, so the Legislature can’t change it unless voters remove it from the constitution. That is what Statewide Question 2 on the Nov. 2 ballot asks them to do.

Frankly, the world won’t end no matter how this issue is resolved.

On the plus side, lifting the limit on the tax break might help some second- or third-generation families keep their farms in the family by allowing them to keep paying the discounted tax rate even as the number of family members who own the land grows. It also could make it easier for large companies to purchase farmland, and some would see that as an advantage because it could drive up prices — and, as a result, tax collections — on nearby land.

Of course, many would see that second point as a negative: Driving up the value of nearby land could make it impossible for some families to keep their land. In the same vein, it’s possible that by keeping taxes high for corporations, the 10-shareholder rule serves to discourage them from buying up farmland and hastening the decline of the family farm. Beyond that, eliminating the limit would certainly increase the amount of land that receives the tax break. That might well force counties either to make do with less money to pay for police and fire protection, schools and other local services, or else to raise taxes on everybody else to make up for the loss.

However, while we have not yet concluded whether the state would be better off with or without the current limit on the tax break, we believe voters should say “yes” to this question, simply because this matter should not be in the constitution. Constitutions should be broad statements of principle that lay out the foundation of a government and delineate essential rights. A constitution should contain only those matters that are so essential to the orderly functioning of society that we need to ensure that they cannot be changed on a whim. The gulf is huge between the protection needed for a given rate of taxation and the protection needed for, say, the idea of three branches of government or the right to a trial by jury or universal suffrage.

Changing the constitution won’t eliminate the 10-shareholder limit; it will simply allow the Legislature to change it, as it changes hundreds of other laws every year. If you think it would be a bad idea to lift the limit, then you should by all means lobby lawmakers to keep it in place. But don’t keep the limit in the state constitution. It simply does not belong there.





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