{"id":2844,"date":"2009-12-29T10:01:34","date_gmt":"2009-12-29T15:01:34","guid":{"rendered":"http:\/\/kevinbryant.com\/2009\/12\/29\/tom-davis-make-sc-tax-code-fair-competitive\/"},"modified":"2009-12-29T10:01:34","modified_gmt":"2009-12-29T15:01:34","slug":"tom-davis-make-sc-tax-code-fair-competitive","status":"publish","type":"post","link":"https:\/\/www.kevinbryant.com\/kbarchive\/tom-davis-make-sc-tax-code-fair-competitive\/","title":{"rendered":"Tom Davis: Make S.C. tax code fair, competitive"},"content":{"rendered":"

from Greenville News<\/a><\/span><\/span><\/p>\n

<\/span>One of the problems with state government in South Carolina \u2014 aside from the fact that it is too large, wasteful and inefficient \u2014 is that it routinely makes decisions that benefit well-financed special interests rather than the best interests of the people.<\/p>\n

How can that be in a representative democracy?\u00a0 Well, start with the fact that there are currently 377 lobbyists representing 534 companies and organizations at the Statehouse, each of them pushing for special treatment for their clients.<\/p>\n

Next, look at the fruits of those lobbyists\u2019 labor: Our tax code has 112 sales tax loopholes.\u00a0There is no rhyme or reason to these tax breaks; they range from portable toilet rentals to time shares, newspapers to direct mail postage, amusement park machinery to manufactured housing.<\/p>\n

And then look at our state\u2019s \u201ctax incentives\u201d carousel.\u00a0 In the past decade, the special tax breaks doled out by the Legislature \u2014 special exemptions from taxes that the rest of us have to pay \u2014 have increased from $32 million to $254 million a year.<\/p>\n

Public officials like incentive deals because it gives the appearance that they are \u201cdoing something\u201d to create jobs.\u00a0 But while government press releases gush about how those deals \u201ccreate\u201d jobs, they never mention the extra tax burden that falls on everyone else in order to pay for them \u2014 a burden that ends up destroying more jobs than are created.<\/p>\n

It makes no sense to have a tax system that encourages private parties to fight over obtaining public favors.\u00a0 When it becomes profitable for them to put time and money into lobbying politicians for favors, then that is precisely what they will do.\u00a0 Why encourage such unproductive behavior?<\/p>\n

And why let government pick winners and losers in the marketplace in the first place? Public officials should avoid what Nobel laureate Friedrich A. Hayek called the \u201cfatal conceit\u201d and leave that chore to the private sector and the profit and loss system. Top-down economies planned by government fail; those driven by the private sector and the free market flourish.<\/p>\n

Unfortunately, however, our state\u2019s economy is rapidly becoming top-down driven. As the South Carolina Policy Council documents in \u201cUnleashing Capitalism,\u201d total government spending in South Carolina amounts to 40.5 percent of the state economy \u2014 the 10th highest percentage in the nation \u2014 while North Carolina\u2019s and Georgia\u2019s is only 32 percent and 30 percent, respectively.<\/p>\n

The private and public shares in a state\u2019s economy, of course, add up to 100 percent and our goal should be to maximize the former\u2019s share and minimize the latter\u2019s. But South Carolina is doing the exact opposite, increasing state intervention in the economy and sliding toward the government percentage of the least prosperous state (West Virginia at 50 percent) and away from the most (Connecticut at 20 percent).<\/p>\n

As the Policy Council notes, South Carolina has a hard-working labor force, abundant natural resources, excellent ports and major metropolitan areas, yet our per capita income is only 80 percent of the U.S. average. And what holds us back is our state government\u2019s policy of doling out tax favors to the well-connected and trying to pick winners and losers in the marketplace. Here\u2019s what we should do:<\/p>\n

First, declare that no South Carolinian gets special treatment at the expense of another and call for all special sales tax breaks to expire by a certain date unless a new law is passed to keep them. Some exemptions, such as the one on grocery sales, make sense and are broad-based. But since the 112 special tax breaks represent about $2.5 billion annually, closing even a fraction of them would result in a huge revenue increase.<\/p>\n

Second, resist the temptation to spend that new revenue. Yes, there have been substantial budget cuts in the past two years, but state government spending grew by 41 percent in the four years prior. Per capita state government spending in South Carolina is still 22 percent higher than Georgia\u2019s and 13 percent higher than North Carolina\u2019s. State government has enough money to discharge core functions if it is forced \u2014 as private households are \u2014 to spend wisely.<\/p>\n

Third, use the new revenue to lower the state sales tax and the state income tax across the board so that everyone pays lower taxes, not just the politically connected. Lower taxes for everyone promotes free market entrepreneurship and discovery \u2014 the true sources of prosperity.<\/p>\n

These straightforward changes to how we tax in South Carolina would simplify our tax code and put us on the cutting edge of tax policy nationwide. They would make us a magnet for jobs and investment at a time when other states are poised to enact massive tax hikes.<\/p>\n

More importantly, these changes would put more money into the pockets of the people whose hard work drives our economy \u2014 the South Carolina taxpayers.<\/p>\n

Additional Facts<\/span><\/p>\n

GUEST COLUMN<\/span>Tom Davis is a state senator for Beaufort County. Write to him at P.O. Drawer 1107, Beaufort, 29901-1107.<\/p>\n
<\/div>\n<\/div>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

from Greenville News One of the problems with state government in South Carolina \u2014 aside from the fact that it is too large, wasteful and inefficient \u2014 is that it routinely makes decisions that benefit well-financed special interests rather than the best interests of the people. How can that be in a representative democracy?\u00a0 Well, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":{"0":"post-2844","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2gEQ0-JS","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/posts\/2844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/comments?post=2844"}],"version-history":[{"count":0,"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/posts\/2844\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/media?parent=2844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/categories?post=2844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kevinbryant.com\/kbarchive\/wp-json\/wp\/v2\/tags?post=2844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}