South Carolina’s revenue is based on a three legged stool of income, sales, and property taxes. Today, 42% of SC income tax filers pay one of the highest personal income tax rates in the country, while 41% of those filers pay nothing at all. Because of special deals, we exempt more from sales taxes that we collect. And the same piece of property, depending on who owns it, and what it is used for, can have three different, and drastically more punitive, tax liabilities.
What is described here is a tax system that is broken. It is assessed on a very narrow base at high rates. It leaves the middle class to carry the full burden. But the problem is not that it is only unfair, it is also unsustainable as the already narrow base is shrinking every day.
South Carolina requires a complete overhaul of her tax code. A comprehensive tax reform process will result in a tax structure that is fair and equitable to all citizens. It will greatly reduce the use of “special deals” for the well connected, while at the same time ensure that our businesses and industry can compete in today’s global economy by being predictable and stable through all economic cycles. If committed, we have the ability to greatly reduce the overall tax rates, and position our tax policy for the new economy.
With an improved tax policy, government must enter into a new era of responsible fiscal policy. With stable and predictable revenues, government will avoid scenarios where massive surpluses result in unbridled spending, and wild deficits result in draconian cuts to public services. Government should always be guided by the principle of fiscal responsibility at all times with constant recognition that revenue of the state is wealth that belongs to her citizens.
Regulations should be considered only to protect the consumer and where health and welfare are potentially jeopardized. Regulations should not be used to tilt the playing field to the benefit of one special interest group. Free market principles are the best way to ensure opportunity.