|
Through the years, state lawmakers have come up with some pretty
awful ideas. But the tax-swap plan has to be among the worst ever.
It's fiscally reckless, nakedly self-serving, anti-business and
downright immoral.
Immoral? It's a strong term. But justified in this case.
Here's why: House lawmakers want to eliminate most homeowners'
taxes and replace them by raising the state sales tax from 5 percent
to 7 percent.
|
Advertisement
|
 |
This is a huge boon to the wealthy and a kick in the teeth for
poorer South Carolinians.
Affluent South Carolinians who own mansions, homes on the beach
or pricey lake-side houses would see their tax bills fall by
thousands of dollars.
Who would subsidize the tax cut for the rich? It's easy to see:
renters, seniors, the disabled, mobile home-owners and other working
people who own inexpensive houses.
Renters would get no property tax relief. Seniors and the
disabled who live in modest homes already get a $50,000 property tax
exemption and would see little or no added relief. All others who
own mobile homes (about 25 percent of all homes in the state) and
other relatively inexpensive houses, particularly in rural areas,
would get perhaps a tax cut of a few hundred dollars.
But their sales tax bills would rise from 5 cents to 7 cents on
the dollar. That's a 40 percent tax hike.
Elitist lawmakers, eyeing the upcoming election and anxious to
generate campaign cash, want to take the tax burden off the wealthy
and place it on the shoulders of poorer and middle-class South
Carolinians.
A little snooping around county tax records suggests that the
owner of a million-dollar home in Greenville pays more than $7,000
in property taxes while the owner of a $33,000 home in Anderson pays
$400.
The inequity of the tax cut would be staggering. The affluent
homeowner would get a tax cut 15 times that of the modest homeowner.
Supporters of the property tax cut constantly trot out the
example of seniors on a fixed income who supposedly are being taxed
out of their homes. That's why they want to cut taxes: for those
seniors.
But that's a phony argument: If seniors are overtaxed, the
solution is easy: raise the senior exemption. But don't use the
excuse of overtaxed seniors to slash taxes on the wealthy who can
afford to pay their fair share.
That's what this debate should be about: paying one's fair share.
Property taxes are a much fairer tax than sales taxes. The latter
taxes are regressive because poor people spend a larger percentage
of their income on necessities. It doesn't help much that the
tax-swap plan comes with a proposal to eliminate the tax on
groceries.
There are other problems with the tax-swap plan:
It would diminish home rule. This tax swap is a shameless power
grab. State lawmakers would be robbing local governments and school
districts of their taxing power, centralizing it in Columbia. How
could a local government raise taxes to hire more police or buy a
fire engine? What if a school district needed to raise salaries to
make them more competitive with neighboring districts?
It would give South Carolina, along with three other states, the
highest general sales tax in the nation. That would be a huge drag
on business activity. That's why the state Chamber of Commerce is
fighting the tax swap.
It would take a stable tax -- property tax -- and replace it
with a less stable tax -- the sales tax, which fluctuates with the
economy.
South Carolina's current tax system is notably balanced -- a
fairly even mix of income tax, property tax and sales tax.
House lawmakers want to take that fair, stable and well-balanced
system and replace it with one that's unfair, unstable, unbalanced
and anti-business.
That's just, well, crazy.
House lawmakers are suffering from mind-clouding election-year
fever. Senators will have a chance to step in and demonstrate
leadership for all South Carolinians, the well-to-do and the poor
alike. |
Local News
