IT SOUNDS LIKE a great deal: no more property taxes on your house, or at least no more school property taxes — about 60 percent of the bill. All you have to do is pay two more pennies at the cash register. And to top it off, no more grocery taxes.

And it is a great deal — for some people.

For many, it’s not.

It’s a bad deal for many homeowners (and all renters), who will pay more in extra sales taxes than they save in reduced (or even eliminated) property taxes.

It’s a very bad deal for many of the businesses that provide the jobs that allow us to pay our bills.

And over time, it will be a bad deal for public schools — which means it will be a very bad deal for all of us who hope to live in a South Carolina with a robust economy and a comfortable quality of life.

But with a few nips and tucks, applying simple principles, we can fix these problems.

Focus on the big picture

Most of the money for police, prisons, schools, colleges, environmental protection and other government services in South Carolina comes from the sales tax, the property tax and the income tax.

This “three-legged stool” keeps revenue from fluctuating wildly as the economy changes. It also helps make sure everybody pays their fair share, as each tax hits certain groups harder than others. And it can keep the rates of any one tax from going too high.

In the past few years, our stool has gotten a little wobbly, as the property tax leg has grown longer. Local governments increased property tax rates as the Legislature sent them less money and more responsibilities. And the property tax base has grown much faster than the sales tax base or the income tax base.

So adjustments are in order, to address this slight imbalance. But to avoid creating a worse imbalance, lawmakers must not let emotion overtake rational thinking, by focusing on the short-term goal of satisfying a specific constituency. They must focus on the big picture, which means making sure the overall system:

• Generates the money necessary to meet our agreed-upon needs.

• Remains steady as the economy surges and recedes.

• Spreads the tax burden fairly.

• Doesn’t hinder job growth or conflict with our values.

• Allows citizens to control their local communities.

It also means making sure that school funds are distributed so that all children in the state have the opportunity to receive the same quality of education.

How the proposals stack up

The current Senate proposal would increase the sales tax from 5 percent to 7 percent and phase out the sales tax on groceries, eliminate the taxes on owner-occupied homes and automobiles that pay for school operating costs, and give renters an income tax rebate to make up for the higher taxes charged on rental property. Schools would still receive property taxes from businesses, rental properties and second homes, and the state would make up the funding they receive from homes and cars; cities and counties would be funded the way they are now.

The House plan also would increase the sales tax to 7 percent and eliminate grocery taxes. But it would use the money to eliminate school, county and city property taxes on owner-occupied houses. Cities, counties and schools would still receive property taxes from businesses, rental property, second homes and automobiles, and the state would make up for residential taxes.

Both proposals would place a cap on how much local governments could increase property tax rates.

Neither plan meets the goals of a good tax system.

In fact, the only goal they would meet (besides calming angry homeowners) is generating enough money to meet our agreed-upon goals. And they meet that goal only if you assume we’re doing that now.

Over the long haul, they would generate less money than the current system, because the base for property taxes is growing so much faster than the sales tax base.

The problems with sales taxes

The sales tax is popular, but it has problems. First, poorer people have to spend more of their income than richer people on food, clothing and other taxable goods. So in South Carolina, the sales tax eats up 3.7 percent of their income; the richest pay just 0.6 percent of their income in sales taxes.

A regressive sales tax can balance out a tax system that charges richer people more in other taxes. But we don’t have such a system: The poorest fifth spends 8 percent of their income on state and local taxes; the richest, 5.5 percent. These plans would widen that gap.

They also would increase taxes on businesses, which wouldn’t get any property tax relief and would have to pay higher sales taxes on their purchases. Some can pass those taxes along to customers; others would have to cut their workforces.

The swap also would give South Carolina one of the highest sales tax rates in the country — 7 cents statewide and up to 9 cents in some counties, with even higher tax rates on restaurant meals. People avoid higher taxes when it’s easy to do so: They go to North Carolina or Georgia or the Internet. That could force some businesses to cut more jobs, or even close.

What about local control?

The other major problem with both plans is that they strip communities of the power to govern themselves.

The tax caps allow legislators from Greenville, Charleston, Florence and York counties to tell people in Lexington County how much they can spend on police, fire and other local services.

The House plan would further neuter local decisionmaking by replacing some city and county property taxes — which are set at the local level — with however much sales tax money the Legislature chooses to send cities and counties in a given year.

Lawmakers can encroach less on city and county prerogatives by rejecting the tax caps and limiting their tax swap to school taxes. But the plans still would reduce local school control.

Reduce local funding, and folks in, say, Richland 2, can’t decide to pay higher taxes to have more foreign language classes or to attract better teachers.

There is only one possible justification for creating that situation: to ensure that all children have the opportunity to get a good education, no matter where they live.

But whether you accomplish that depends on how the state distributes the money. That decision, which neither the House nor the Senate has tackled so far, could make or break the whole tax reform package.

Educating all our kids

The last time lawmakers replaced some school property taxes with state revenue, they sent money to the counties on a dollar-for-dollar basis. Those that had, got; those that didn’t went without. The formula has been adjusted since then, but the basic approach is unchanged — and it remains unacceptable.

Sending money to the schools on a per-student basis is better. But even that ignores the fact that it costs more to educate poor kids than middle-class kids.

That nearly universally accepted truth is the basis for most state formulas, which provide more money per student to poor districts than to wealthier districts. That approach must be used for distributing all state funds.

Wealthier districts worry that this would guarantee they couldn’t afford those foreign language classes and higher teacher salaries.

But linking the fortunes of wealthy, politically powerful districts to the fortunes of poor districts may be the only way the Legislature will ever provide enough money to poor districts to create the well-educated workforce throughout the state that will attract good-paying jobs, turn today’s students into tomorrow’s taxpaying citizens and improve everybody’s standard of living. That’s because lawmakers won’t dare tell their affluent constituents that they must accept less.

Simple, if not easy, solutions

The tax swap itself still presents problems. Fortunately, just as relying too heavily on a sales tax creates problems with fairness, stability and the economy, reforming the sales tax can solve many of the problems.

Lawmakers already support one part of the solution — exempting groceries from taxation. That will make the sales tax much less regressive.

Expanding the sales tax base, on the other hand, makes the tax less susceptible to economic ups and downs, and allows you to keep the rate down.

That starts with eliminating some of the more than 60 special tax exemptions, which keep a third of the products sold in South Carolina from being taxed.

It makes sense to exempt raw materials, so we don’t tax the same things twice. But many exemptions can’t be justified, and need to be eliminated. Topping the list is the $300 sales tax cap on cars, which causes the tax rate to go down as the cost of the car goes up.

The other way to broaden the sales tax base is to tax more services. South Carolina taxes 32 of the federal government’s 164 categories of services, from cell phone and diaper services to auto rentals and sign installation. Just about all states tax more services.

Taxes on some services create double-taxation, just as taxing raw goods does. And taxes on services that people can purchase elsewhere (accounting, for instance) could drive some business out of state. But many services — housecleaning, pet sitting, plumbing, for instance — must be purchased locally. Such services should be taxed, just like products.

Taxing more services also makes the sales tax less regressive, because wealthier people tend to spend more of their money on services than do poorer people.

Reaching the best compromise

The sales tax leg of the stool would likely grow too long under either the House or the Senate proposal. One way to even things back up is to take away several of the local sales taxes. Another would be to let local governments use impact fees to cover more of the infrastructure costs that growth demands.

Some changes in property tax exemptions could also help keep the new tax system from being even more regressive than the one we have now. Adjusting income tax brackets would be the best way to ensure fairness across income groups.

Beyond the big three taxes, South Carolina has the lowest cigarette tax in the country and the fourth-lowest gasoline tax. Those low taxes encourage kids to smoke, and discourage conservation, propping up Middle East despots. The best time to increase both of those taxes is now, as part of whatever plan emerges.

When you’re dealing with something as complex as redesigning a tax system, the question isn’t whether the final plan looks exactly the way anyone wants. If it does, it’s probably unacceptable to most people. The question is whether it does more harm than good.

If we keep our focus on meeting those essential goals of adequacy, stability, fairness and allegiance to the values of our society, then the plan that finally emerges should do that. If we don’t, then it likely will do more harm than good — and should be rejected.