Since taking office, Governor Mark Sanford of South Carolina has sought to cut his state's income tax, which tops out at a 7 percent rate. Yesterday, he unveiled a proposal to offer residents the option of sticking with the current code, or paying a 3.4 percent flat tax, with no exemptions or deductions.
He estimates the revenue loss would be $107 million, which he proposes to make up by increasing the state tax on cigarettes from 7 cents to 37 cents. According to the Governor, it's a step to increase South Carolina's competitiveness and bring about sound tax policy:
This is about beginning a long-overdue conversation in South Carolina about the way we tax and about the need to simplify our tax structure. To that end, we're making this proposal as a way of starting that conversation and as a way to take a meaningful step in that direction.
Sanford has tried reforming the state income tax several times since taking office:
In 2003 Sanford supported raising the cigarette tax to cover Medicaid costs, while advocating gradual reductions in the top income tax rate from 7 percent to 6.5 percent in the first five years, and then to 5 percent over the next 10 years. In 2004 he supported a proposal to reduce the income tax rate to 4.75 percent over 10 years. The proposal passed the House, but was killed by a seven-hour filibuster by Senate Democrats. A similar measure approved by the House in 2005 was scaled down by the Senate to a reduction in small business taxes, which Sanford signed, while vowing to return the next year "asking for what the Senate ultimately didn't give you this year."
In 2006 Sanford proposed an income tax rebate and limiting state spending to population growth plus inflation with a referendum similar to Colorado's Taxpayer Bill of Rights, also known as Amendment 1. But lawmakers were more interested in property tax relief that year, and Sanford ultimately signed a bill raising the sales tax by 1 percentage point to pay for a partial property tax exemption for owner-occupied homes and a reduction in the tax on groceries.
While we've criticized (most recently yesterday) the soundness of raising cigarette taxes for general revenue needs, the flat tax plan is an intriguing one, and hopefully it will generate a good discussion about tax policy in the Palmetto State.
Holiday Tax –pectations
There's a lot of talk of silly tax policy now-in-days. Every politician seems to have some funny gimmick that will tax some group to pay for a program for some other group. So with the holidays upon us, here's a list of new taxes we wouldn't be surprised (for better or usually for worse) to see proposed:
Egg nog and Christmas cookie "fat" tax
They are staples of the holiday diet, but they're also the cause of the ever-expanding American waistline. Therefore, it's time to tax these holiday favorites into oblivion.
Christmas Tree Global Warming Tax
Deforestation is certainly a cause of global warming, so expect that evergreen to cost a bit more green next year.
Menorah Candle Carbon Offset Fee
Burning candles is one quick way to increase your carbon emissions, so prepare to give one night's worth of presents to the tax man.
The Gift of the Magi Sales Tax Holiday
Perhaps with a bit of incentive from the taxman Jim and Della could have afforded that watch chain and hairbrush outright (though that doesn't solve the question about the income they gained from pawning the watch and her locks of hair - maybe next year).
Holiday Lights Carbon Tax
Electricity runs on coal and coal equals carbon, so plug in Frosty on the front lawn and prepare to pay.
Ebenezer Scrooge Charitable Donation Deduction
Maybe old Scrooge would have abandoned his miserly ways a bit sooner if he'd had a bigger tax incentive to do so. Maybe Tiny Tim will have the holiday the feast he always wanted after all.
Snow Shovel Tax Credit
Tax policy isn't just about penalizing "bad" behavior. This year, we'll reward those who buy a shovel instead of firing up the ol' snow blower. After all, there will be no more white Christmases for them if they keep up their gas-powered ways.
Coal in the Stocking Carbon Tax
Well, duh. What else would you expect after a year of being bad but an added tax?
New Years Eve Champagne Liquor Tax
Booze is always a favorite target for special taxation, so why not up the ante on the biggest celebration of the year. You're going to pay for popping that cork this year.
New Years Cigar Tobacco Tax
Tobacco is another easy target, so there's no reason to leave them out of this holiday tax-and-spend-a-palooza. Puffing on that stogie will mean paying the piper this go around.
and finally...
The Broken Resolutions Fee
You promised to lose weight, you promised to spend more time at home, you promised to go out and volunteer... and broke every single one of those resolutions. You got away with it last year, but not this go around. Break your word and pay the price. After all, if the tax man isn't watching out for you, who is?
Happy holidays!
No comments:
Post a Comment