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Article published Dec 15, 2003
Lawmakers keep proposing small fixes but not systemic
overhaul
The chairman of the House Ways and Means Committee
has joined the governor and other lawmakers by proposing his ideas for adjusting
the state's tax system.There is no shortage of ideas for adjusting, changing and
tweaking the tax system. The General Assembly has adopted many of them over the
past several years. Most have made the tax system worse, less stable and less
equitable.But no one is offering what is really needed: the complete
restructuring of the tax system, an overhaul with the goal of simplification and
fairness.Rep. Bobby Harrell, R-Charleston, chairman of the House Ways and Means
Committee, wants to raise the state sales tax by an additional penny on the
dollar and end some exemptions to the tax. He would use the revenue generated by
this increase to eliminate vehicle property taxes and provide relief from
homeowners' property taxes.Another pair of lawmakers, Republican Rick Quinn and
Democrat Vince Sheheen, want to increase the sales tax by 2 cents on the dollar,
eliminate the exemptions to the tax and use the money to end the portion of
property taxes that supports schools.Sen. David Thomas, R-Fountain Inn, is
pushing his own variation on this theme.Meanwhile, Gov. Mark Sanford wants to
raise the state cigarette tax by 61 cents per pack and apply the state sales tax
to lottery tickets. He would use that revenue to lower the state income
tax.Other lawmakers want to increase the cigarette tax and use the money to pay
for health programs.What's lost in all these competing ideas is a perspective on
the harm that's been done by previous tinkering with the tax system.Former Gov.
David Beasley convinced lawmakers to approve his homeowners' property tax relief
measure. It cut property tax bills by providing a state subsidy. But lawmakers
now struggle to fund the subsidy, and the distribution of the money has been
corrupted to the point that it is no longer property tax relief. It is just
another method of funding schools.Lawmakers wanted to create the appearance that
they were addressing the hated vehicle property taxes, so they allowed voters to
reduce the assessment on vehicles, planes and boats. Voters jumped on the offer
but simply ended up paying more on their homes to make up for the lost
revenue.Meanwhile, in order to attract more jobs, the state has shifted much of
the tax burden from industry to small businesses and homeowners.And local
governments are still primarily limited to the property tax as a method to raise
their revenue.The state needs to scrap its complex tax system that has been
burdened by lawmakers' Band-Aid approach to tax reform. It needs a complete
overhaul to create a more simple system that gives local governments some
flexibility, gives school districts equitable funding and doesn't overburden
homeowners.