(Lexington) Oct. 26, 2005 - Lawmakers are
drafting a proposal that would increase the
state sales tax, and lower property taxes. But
any time changes in the tax system are proposed,
there are winners and losers.
Customers come to Ultimate Audio in Lexington
to equip their cars with flashy wheels and music
systems that shake the entire vehicle. In
Lexington, customers already pay a six per cent
sales tax.
Shawn Arnold owns the shop. He doesn't
want to see the taxes his customers pay go even
higher, "People come from all around. We get a
lot of business from Georgia, North Carolina. So
that might slow down some because taxes are
lower there than they are here."
Lawmakers are considering a fundamental
change in the state's tax structure. Lower
property taxes in exchange for a higher state
sales tax. One proposal approved this week by a
Senate committee would drop property taxes by
half, which raising the state sales tax by two
cents on the dollar.
Some retailers like Arnold worry a higher
sales tax could send customers to the internet,
"When people go on the internet and look for
stuff, they're definitely price shopping. You
know you get no customer service when you do
that but a lot of people buy on price only."
Analysts say the sales tax increase could
also have a chilling effect on efforts to
attract new industry to South Carolina. And they
say people with lower incomes and less property
would carry more of the tax burden.
What happens if the economy cools? Spending
for non-essentials, like car audio, could drop.
That would mean less revenue for business owners
like Arnold, and less for the state.
But lawmakers have been under heavy pressure
to cut property taxes. Saluda County homeowner
Roscoe Joyner says a higher sales tax would
shift the tax load to more people, "I believe
the property tax is way too high and it should
be lowered. And by raising the tax then people
outside the state would help pay some of the
debt too."
Both the Senate and House are developing tax
plans. Expect supporters and critics to turn up
the volume on this issue when the legislative
session gets underway.
Reported by Jack
Kuenzie
Posted 6:25pm by Chantelle
Janelle
