FOR EVERY $2 WORTH of products that our state taxes, $1 worth of products are sold without any taxes, thanks to more than 60 special exemptions legislators have written into state law. The impact is enormous. If we removed all the exemptions, we could increase our sales tax collections by half — or $1.25 billion. Alternatively, we could reduce our tax rate from 5 percent to 3.3 percent and bring in the same amount of money.

Of course, we don’t need to remove all the exemptions. The idea behind some of them makes sense, and removing them could make the sales tax even more regressive or hurt the economy. But the exemptions demand a thorough examination. Some can no longer be justified. And even where the idea for an exemption makes sense, it is not applied consistently; to be consistent, we probably should consider adding some others.

The bulk of our exemptions are built around the defensible idea that you shouldn’t tax raw goods that go into the production of consumer goods; such taxes result in a higher effective tax rate on the finished product, and they put S.C. businesses at a competitive disadvantage. But the list is spotty: We exempt farm machinery and manufacturing equipment and, yes, newsprint, on that basis. But we don’t exempt construction materials or a number of other raw goods.

The sales tax is inherently regressive: It takes a higher percentage of the income of the poor; rich people spend less of their income on taxable goods. So the exemption for residential electricity can make sense. But it would make more sense to exempt groceries.

It makes even more sense to change our backwards exemption on automobiles, boats and airplanes. Whether you buy a $6,000 car or a $10 million plane, you pay $300 in sales taxes. That means the more expensive the automobile, the lower the tax rate. If lawmakers don’t want to charge a full 5 percent tax on cars, there are better ways to adjust that — from exempting the first $6,000 instead of everything above $6,000 to taxing the entire sale at half that rate — without changing the amount of money the tax brings in.

Sweeping tax reform proposals by Reps. Rick Quinn and Vincent Sheheen and by a group of school finance officers are taking aim at many of the exemptions. A more limited plan by House Ways and Means Chairman Bobby Harrell would eliminate a handful of them.

Those efforts are no sure thing. Rep. Harrell says he deliberately kept his list short so he wouldn’t attract enemies to his plan. The Quinn-Sheheen list is expanding and shrinking by the day, it seems, as the sponsors find intractable opposition to lifting one exemption, and try to replace it with another to keep the plan balanced.

We can certainly understand politicians’ reluctance to tackle this list. But this is an issue that can no longer be ignored. Because the list of exemptions has grown so large, it forces us to either drastically reduce government services or else keep our tax rates higher than necessary. And because it includes so many provisions that were obviously included as special favors to powerful interests, it undermines public confidence that state government operates in the interest of the public.

Read our series at www.thestate.com/mld/state/news/opinion/.