Business leaders offer bankrupt tax ideas

By WILL FOLKS

Guest columnist

Sometimes you don’t have to search too hard to find wolves in sheep’s clothing — they growl loudly enough so as to make themselves easily identifiable.

I couldn’t help but notice precisely such a “snarl” coming from Harris DeLoach and Don Herriott’s Tuesday column in The State, “Tax plans must mot cripple competitiveness,” in which these two eminently successful CEOs offered the following zinger on South Carolina’s current tax reform debate:

“While the answer for many is simply to lower taxes, this approach does not consider a key issue for South Carolina — the need to stay competitive and grow the state’s economy.”

Wait a minute, let me see if I’ve got this straight: These two prominent leaders of the so-called “business community” here in South Carolina say we can’t lower taxes because it would be — gasp — bad for the economy?

While we give Adam Smith — author of Wealth of Nations and founder of modern-day capitalism — a moment to finish rolling over in his grave, it’s important to analyze this latest cruise missile the South Carolina “business community” is lobbing into the tax debate.

Sure, the current legislative stampede toward swapping property tax relief for a 2-cent sales tax hike has its flaws — most notably the lack of a job-creating income tax relief component and, correspondingly, its failure to do anything to slow the rampant growth of state government — but the discontent the plan is engendering among our state’s “business leaders” is telling. In fact, lurking beneath their opposition is an even greater cause for concern among those of us who really believe in growing our state’s economy.

Spearheaded by the increasingly left-leaning S.C. Chamber of Commerce and self-appointed dilettantes like the Palmetto Institute’s Darla Moore or Carolina First CEO Mack Whittle, DeLoach and Herriott are aligning themselves with a philosophy inherently at odds with the legitimate South Carolina business interests they claim to represent. Specifically, they are advancing a notion that has already failed South Carolina for decades — a belief that new government programs, increased government spending and the higher taxes that go with them are the keys to our state’s economic prosperity.

According to Gov. Sanford’s 2006-07 executive budget, government spending in South Carolina skyrocketed by 156 percent from 1990 to 2006, a rate that nearly doubled the combined growth in population plus inflation over that same period. Last year was no different, with state spending jumping another 9.1 percent despite the fact that South Carolinians’ incomes rose by less than half that percentage.

So what, exactly, has South Carolina netted from this massive taxpayer investment?

Not much. Our personal income levels stand at third-lowest in the Southeast (and 42nd in the nation), we have the second-highestunemployment rate in the country, and both our property and income tax rates currently rank among the highest in the Southeast. Worse still, the billions in new dollars we’ve poured into education (the primary focus of our massive, decade-and-a-half spending spree) have only sustained what is unquestionably the nation’s worst school system in terms of graduation rates and SAT scores. And judging from the recent PACT scores, things aren’t getting any better.

Yet our “business leaders” continue to argue against lowering taxes because it would make us “less competitive.”

Forgive me for being blunt, but if these people haven’t held South Carolina up to the national mirror lately, here’s a news flash — we’re not competitive.

Sadly, whether it’s the notion of job-creating tax relief or keeping government growth in some semblance of check, something is decidedly rotten with our state’s self-proclaimed business leadership.

Unless the real business community stands up and saves itself from its “leaders,” our state can expect more of the same incompetence to prevail.

Mr. Folks is the founder and president of Columbia-based Viewpolitik, a political and corporate communications company. He served as press secretary to Gov. Mark Sanford from 2001 through 2005.

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