Anyone who would like a refreshing change from the utter nonsense we hear so often from the majority over at the State House should read Cindi Scoppe’s column today.
In it she reiterates irrefutable truths that fly completely in the face of the way so many of our pols describe reality.
Over and over again, we hear the people who call themselves “conservatives” railing against all those awful people who keep wanting to raise your taxes. When of course, raising taxes is the least likely thing one could expect from the General Assembly.
Such folks, in arguing that we should adopt their latest pet plan for doing what SC lawmakers love most to do — cut taxes — frequently make like the choice is between their plan and tax increases. Which is laughable.
Excerpts:
I moved to South Carolina in the fall of 1987, a few months after the Legislature raised the gas tax by 3 cents per gallon. It didn’t raise taxes again the next year. Or the next. Or the next 17 after that.
The Legislature didn’t raise taxes again until 2006, and then only as part of a swap that reduced taxes even more, increasing the sales tax by a penny in order to eliminate homeowner property taxes for school operations. And the extra penny hasn’t generated as much money as lawmakers projected, so next year they’ll have to send an extra $118 million in general tax revenues to the schools to make up for the shortfall. That is, they’ll divert $118 million from other spending in order to pay for the tax cut that was supposed to have been offset by a tax increase.
Lawmakers also have increased various fees and raised court fines — all of which take more money out of taxpayers’ pockets but can be avoided by not breaking the law or using fee-based services.
In 2010, the Legislature increased unemployment-insurance assessments by $150 million a year, to support a program that is by law supposed to be self-sustaining. It wasn’t self-sustaining — the state had borrowed nearly $1 billion to pay out unemployment claims — in large part because the Legislature had slashed businesses’ assessments before the recession. (In 2011, the Legislature appropriated $146 million to essentially pay the businesses’ higher assessments for them; this year the House has appropriated $77 million for the same purpose.)…
Also in 2010, the Legislature increased the cigarette tax from 7 cents to 57 cents per pack. This $115 million tax increase came after a decade-long campaign by public-health advocates such as myself who wanted to decrease teen smoking. Even with the increase, the tax remains the ninth-lowest in the nation. Still, this was a real, honest-to-goodness, raise-more-money tax increase.
The only one our Legislature has passed in the past quarter century.
Over those same 25 years, the Legislature has eliminated the sales tax on groceries, a $400 million-a-year tax cut.
It has eliminated homeowners’ school property taxes. That’s worth about $970 million per year, but the sales tax brings in $550 million a year, so the net tax cut is $420 million per year.
It has increased the homestead exemption for senior citizens’ local government property taxes from $20,000 to $50,000. Another $100 million per year.
It has indexed income tax brackets to inflation, saving taxpayers $390 million per year.
It has eliminated the bottom income tax bracket, reducing individual income taxes for everyone and eliminating them for many. That’s worth $90 million per year.
It has reduced the top income tax rate for most small businesses from 7 percent to 5 percent, saving $130 million per year.
And it has handed out at least 39 more sales tax exemptions — ranging in size from $4,000 to $47 million. And more income tax breaks.
According to the Board of Economic Advisors, the tax cuts enacted just since 1991 were worth $2.3 billion in 2009. The tax increases over that same period totaled either $665 million or $815 million, depending on whether you count the unemployment-insurance increase that businesses haven’t had to pay. That’s a net tax cut of at least $1.5 billion per year.
As a result of all these changes, the portion of our income that South Carolinians pay in sales taxes has dropped from about 2.8 percent when I moved here in 1987 to 2.2 percent today. Even as the sales tax rate was increased from 5 percent to 6 percent. Going from 2.8 percent to 2.2 percent might not sound like much, but it’s a 21 percent reduction…
Actually, you should just go read the whole piece. It’s chock-full of simple, obvious facts of which the people who run our state seem to be completely unaware.
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The “high tax” piffle that is regularly purveyed by the likes of Otis Rawl is akin to the results of the Winthrop poll reported in today’s paper, wherein three quarters of respondents believe that, for example, violent crime is up, when it is, in fact, down.
Most voters in this state believe that taxes are too high and that we just need to cut out fluff and waste and it will all be unicorns and rainbows. They do not value what taxes buy–nice roads, safe bridges, parks, good schools, highway patrols…..
Truth Rock indeed! Sisypha Scoppe
Well… from a purely business standpoint, there IS a problem.
I don’t recall exactly what Otis said about taxes, but the truth is that businesses get the shaft on property taxes.
That’s because, for all their “pro-business” rhetoric, the highest priority of the legislative majority has always been populist pandering on taxes. So the tax on owner-occupied property that went to operate schools was entirely eliminated, thereby putting a disproportionate portion of the property tax burden on businesses — including rental property. That’s a real problem on a number of levels.
But maybe Otis was talking about something else.
All you gotta do is elect people who agree with you. Until then, just appreciate representative democracy. The people have spoken.
Or just keep blaming Nikki Haley. That will surely change things.
Blaming Nikki Haley for what? If you refer to actual criticisms of Nikki on this blog, I stand behind them all, because they are all about what SHE had done and not done.
This column is about what the Legislature has done since long, long before Nikki ever dreamed of running for office. She is only implicated in the more recent decision, such as Act 388.
I also hold her responsible for, as governor, continuing to play the same game as the GOP majority in the Legislature — pretending that the State House is some hotbed of people who keep raising your taxes, so you’d better elect Nikki to save you from them.
Which is just grotesque…
Doug,
This is a classic, classic example of the people agitating to keep what is in their pocketbook, without ever having a clue about what could be in their bank account.
Taxing businesses focuses the pain onto a few in such a way as to seriously deter investment in our state. I see it happen every day. Everything is wrong with our tax code. Everything. Including our continued preference for putting a bullet in our collective brain rather than instead focusing on increasing the pie that we are so worried about splitting up.
Infrastructure is an economic engine, and the thing that goverment can best deliver; when it has the resources and the structure to do so efficiently and intelligently.
He’s right about the property tax ASSESSMENT ratio on manufacturing, which is indeed outrageous, except that only chumps pay it–there are so many ways around it–I used to negotiate and document them when I worked at Nexsen Pruet. The sales tax portion is also out of whack–on the items we actually pay taxes on, but is he lobbying to tax the untaxed items?
I know it’s not a scientific comparison, but I FEEL more taxed here than I did when I lived in TN. We had a state/local sales tax rate of 7.75% and no state income tax. I didn’t own property there so I can’t compare property taxes, though.
I remeber South Carolina use to be touted for its responsible tax policy. The “3 legged stool”
I sometimes do rail against high taxes but I am probably incorrect in doing so.
What im more concerned is the TOTAL tax burden for both private, msall buisiness and big buisiness (be it property, water bills, franchise fees) as compared to other cities.
As long as its comparable I totally understand.
Its when its out of balance there is a problem.
I do believe that the City has poorly levied its taxes. If I had a choice on where to put my buisiness in the midlands area why would I put it in Columbia when Cayce or the unincorporated area may be a better bargain?
I really need to follow up with the chamber of commerce or small buisness alliance about this.
I would love to have some hard facts on what the rates really are rather than give my best guess. <3 homework.
I thought she hit on something that you’ve expressed many times, and she put it very succinctly: “the idea that tax relief improves lives is a good one for debate — with its validity depending, among other things, on…whether they’re sufficient to pay for the foundational elements of civilization without which everybody’s individual wealth would plummet.”
Taxes are a side issue; there is little positive correlation between tax rates, economic growth, and entrepreneurial vigor, if each factor is taken in isolation. SC could have the lowest tax rates overall in the nation and it would still be an economic laggard because it lacks two things that experience shows to be positively correlated with economic vigor: Thriving cities and first-rate universities. Yet here in SC, one of the poorest states in the nation, we still indulge in the frivolity of a state-supported military college.
There was an interesting Fox News poll that asked folk whether we are still in a recession. An astonishing 35% said we were not just still in a recession but that it is actually getting worse. Technically the recession ended about 2 years ago and the economy has added jobs, albeit at a slow rate, for that long. Folks believe what they want to believe regardless of the evidence.
The big disconnect that you and Cindi seem to have is understanding that the State House is not a thing… it is (like Soylent Green) PEOPLE. Specific people are responsible for the taxation and spending policies. It is not some faceless machine. It is Bobby Harrell, High Leatherman, Glenn McConnell and a couple others who are responsible. As long as they are in office, nothing will change. You and Sancha Panza-Scoppe can keep tilting at the same windmills, shaking your fists at “the State House” while Harrell and Leatherman peek out the windows and laugh.
@Steve – I’ve often thought that our huge number of public colleges and branch campuses made little or no economic sense. Nobody in this entire state is further than about 3 hours from Columbia, and the state could be very well served with about 3 or 4 public universities – instead of the plethora we have now. Of course, as long as the state senate is overly powerful, this will never happen, because no senator is going to give up a branch campus in their district, no matter how little sense it makes or how few people attend.
Dougs right and the voters are to blame. With large numbers of people believing utter nonsense like young earth creationism, its no wonder we get such a ridiculous tax code.
Silence, where was that in Tennessee? In Memphis, the sales tax is more like 10 percent.
Of course, in Tennessee, local governments are more free to finance themselves as they see fit, and then face their own voters — unlike in SC, where the Legislature dictates what the locals may do.
Yes, Phillip. You will often see Cindi and me expressing the same ideas. We spent a lot of years together, learned a lot from each other, and worked out a lot of ideas in concert with our fellow editorial board members. Which was very convenient for me — I practically quit writing editorials after I brought her up from the newsroom in 1997. All I had to do was speak to her for about 30 seconds, and within an hour she’d have an editorial for me that said all the things I would say. The style might have been slightly different, but why quibble?
Doug, so we’re having that conversation again, are we? Once again, what three or four guys want does not decide the course of the Legislature. Sure, they have more influence than other individuals, but those other individuals are free to vote as they like. What matters is what the majority does. And the majority has blithely followed unwise courses for decades.
You should understand also that while the House is very regimented, and totally about what the GOP caucus wants (there’s much more independent thinking and acting in the Senate), the relationship between the Speaker and his majority runs both ways. Members don’t want to cross the speaker, because he controls committee assignments and such. But at the same time, the Speaker doesn’t try to lead anywhere that his followers don’t want to go, because he’s elected by them, and there’s always somebody gunning for his job.
We’re just going to disagree, and from long experience, I don’t expect you to say, “Well, Brad followed this stuff for a living for decades, and maybe he has more insight into it than I do.”
Of course, apart from who’s right and who’s wrong (and sometimes the individuals matter more than they do other times, so sometimes you WILL be right), we have this other communication barrier: You’re very individual-oriented in everything. You see individuals as independent, self-determining creatures who make decisions in a vacuum. Or something like that.
I’ve spent most of my life working collaboratively with groups of people, and having my necessity to make a study of the dynamics of groups — something that frankly didn’t come naturally to me, because I tend to be independent-minded. Fortunately, for most of my career I was the boss of the group I was working with (as an editor supervising reporters and/or desk editors, and then as editorial page editor) which meant things tended to go my way. But as the boss all those years, I learned the limitations of power, and the extent to which decision-making can depend on group dynamics.
The hardest thing I ever had to learn was peer relationships. My toughest working situations in my career was when I found myself one of a bunch of people at roughly the same level. Sort of like what legislators have to deal with.
I found it much easier to manage relationships up and down a hierarchy — bosses and subordinates (not always, of course — and the worst work situation is to have a dysfunctional relationship with a boss — but generally speaking). But I found all the constant striving and arguing and deal-making and alliance-forming that you have to do to get anything done among a group of peers all trying to achieve their goals with finite resources (there were only so many spaces on the front page each day, for instance, and I wanted as many of them as possible) to be stressful and exhausting.
@ Brad – Knoxville’s sales tax rate is now 9.25%, as is Memphis’.
The state sales tax is 7%. The local sales tax is 2.25% in both jurisdictions. It’s gone up since I left, but still, no state income tax.
Whatever happened to local attorney Matthew Bodman’s lawsuit claiming that all of SC’s sales tax exemptions were arbitrary and capricious? Is it still ongoing?
Brad I respect all of what you just said but the blame has to lie somewhere not just a bland condemnation of the general assembly as a generic bunch that somehow magically appears. These are people with minds and opinions who collectively come to concensus that ultimately conforms to the will of the people. The overused analogy is that this is a lot like making sausage. But the folks who throw the ground up hog carcass into the sausage grinder are the people, more specifically the voters. And sadly the voters are just not informed enough to seek out the best hogs for the process. They somehow manage to pick out specimens with lots of fat and grisle. From their the process can only produce a bad product.
Well, here’s the terrible truth about that — the Legislature, in its unwise decision-making, reflects the lowest common denominators in the electorate.
What is needed is either a sea change in the electorate (not likely), or the emergence of leaders who will appeal to the best and wisest instincts in the electorate, rather than its basest impulses.
This, of course, is why I have advocated for more power for the governor. Because, even though we’ve failed miserably on this point in recent years, it is much easier to elect a governor with vision and leadership ability than it is to replace a majority of the Legislature — and a governor with real power (plus bully-pulpit political gifts) can overcome a lot of deficiency in the legislative branch.
This has been an established fact among close observers of the process — V.O. Key wrote about the influence a governor COULD have in 1949 in a very perceptive chapter on SC, the “Legislative State” — which is one reason why the Legislature, as an institution (no matter who held the leadership positions) has been so reluctant to cede power.
Silence, I’m generally in agreement with you on the needlessly high number of state-supported campuses.
We need leaders who can actually lead – Men and women of persuasive ability who can bend the electorate to their will in the pursuit of a noble aim.
@Brad
So you truly believe there is a path to tax reform that can occur while Harrell and Leatherman remain in office?
Why isn’t Vincent Sheheen stepping up to be the voice of reason? Why doesn’t he lead now instead of promising to lead if he ever gets elected?
RE: branch campuses– In a poor state where many can barely afford to go to college and may well be nontraditional students or otherwise “place-bound,” branch campuses made a lot of sense. Now that distance learning is a workable concept (Professor Fenner frequently teaches distant students), maybe not so much. What do you do with the “branch” campuses’ students, though. USC Columbia cannot absorb a lot more students, nor can Clemson, although Clemson has a better shot at it logistically.
A state-wide chancellor or other supervising body would make sense, to ensure that resources are reasonably allocated. Off the top of my head, but with some knowledge based on reading and speakers I’ve heard,I’m guessing more resources should go to the tech schools and for 2 year degrees.
They’ve been discussing getting rid of the branch campuses that overlap with the tech system campuses for a long time — I know it was actively debated when I was teaching back in the mid 90’s. I agree we’ve got more than we need.
Sumter was one that was deemed to be overserved–a USC campus and a tech college, I seem to recall….and Sumter is a reasonable commute to Columbia, unlike, say, Allendale.
“Why isn’t Vincent Sheheen stepping up to be the voice of reason? Why doesn’t he lead now instead of promising to lead if he ever gets elected?”
Doug,
I know you have a particular beef with this, but putting aside Sheheen’s gubanatorial campaign, what exactly is a minority member of the Senate supposed to do, other than propose and attempt to pass legislation? Rotary club speeches -which we know your feelings on- are about all that he has in his toolkit, unless I am misreading the State Constitution.
Allendale is about the same distance from Aiken as Sumter is from Columbia.
Four Year Public U’s/Colleges:
USC System – 8 Campuses (really 10)
USC Columbia – 30,000 students
USC Aiken – 3100
USC Beaufort – 1750 (2 campuses)
USC Lancaster – 1000
USC Salkehatchie – 1000 (2 campuses)
USC Sumter – 1400
USC Union – 400
USC Upstate – 5500
Non-USC System:
College of Charleston – 9866
The Citadel (Charleston) – 3150
Winthrop (Rock Hill) – 6000
Clemson – 15,459 undergrads
Coastal Carolina (Conway) – 8360
SC State (Orangeburg) 5000
Francis Marion (Florence) – 4187
Lander (Greenwood) – 3000
Tech College System:
Aiken Tech
CCTC
Denmark Tech
Florence-Darlington Tech
Grenville Tech
Horry-Georgetown Tech
Midlands Tech
Northeasten Tech
Orangeburg-Calhoun Tech
Piedmont Tech
Spartanburg Community College
Technical College of the Lowcountry
Tri-County Tech
Trident Tech
Williamsburg Tech
York Tech
We should all be getting pretty well educated….
@silence — we should all be getting pretty well educated
and then add in the private colleges — Wofford, Converse, Furman, Presbyterian, Newberry, Columbia, Benedict, Allen, Chaflin, Bob Jones, Columbia Bible, Baptist College etc.
Don’t forget about Furman, Wofford, Presbyterian and Newberry … and Benedict / Allen. Then there are also the school in North Charleston who’s name escapes me at the moment, North Greenville and Bob Jones – if that one really counts.
So, as with the legislature, what we have here in education is a broad swath of middling performers.
Don’t say that to the Wofford people. They’re kind of intense…
Let’s not forget all these for-profit schools. Seems like conservatives have found a new way to separate naive people from their money. I’d wager those places are more sinister than the payday lending places. (Of course I can’t really wager anything in SC. That would be illegal).
Apropos of nothing, I happened to look back at the headline on this post, and thought of T.S. Eliot: “The Love Song of J. Alfred Truth Rock.”
Sorry…
Yes, bud, unless it’s the “Education” lottery or those machines that really, really, we promise, aren’t video poker machines…..
But Brad, do you dare eat a peach?