SC Eyes Internet Sales Tax Hike

Let the nickel and diming of Palmetto taxpayers begin …

A new tax on internet sales is just one of dozens of “revenue enhancements” currently being considered by a Tax Realignment Commission.

In fact, officials from North Carolina – which just implemented an Internet sales tax – have been working with South Carolina officials to show them how to do the same thing here, despite the fact that a 1992 U.S. Supreme Court ruling forbids one state from forcing tax obligations on out-of-state merchants.

As we’ve noted here on FITS several times in the past, South Carolina will face a budget shortfall in the winter of 2010 – one that it would have faced earlier this year had it not been for the infusion of hundreds of millions of federal “stimulus” dollars into the state’s coffers.

Where did all that money go?

Glad you asked.  According to data compiled by the S.C. Comptroller General’s office, the vast majority of this federal largesse has gone toward unsustainable entitlement growth and other bureaucratic programs.

All government, in other words, which is why we’ve always referred to this boondoggle all along as a “bureaucratic bailout.”

Not surprisingly, the impact of that government bailout on our state’s economy has been negligible at best.  While the administration of President Barack Obama claims to have “saved or created” 8,100 jobs in the Palmetto State, data from the S.C. Employment Security Commission shows that South Carolina has lost a total of 80,000 jobs this year, with tens of thousands of additional South Carolinians currently classified as “underemployed.”

Basically, unless you work for the government the only thing that’s been “stimulated” by this infusion of federal cash is the massive debt load that your children, grandchildren and great-grandchildren will have to repay.

Anyway, while South Carolina families, small businesses and workers struggle to make ends meet during difficult times, state government is looking ahead to next winter – when all that federal money won’t be available anymore.

Specifically, they’re looking to places like the Internet (and homeowners associations) to raise taxes and fees in an effort to cover the “shortfall,” a phraseology which of course conveniently ignores the fact that the state budget has grown by $5.3 billion over the past seven years.

Don’t believe us? Look at the numbers …

YEAR – TOTAL S.C. BUDGET (STATE, FEDERAL, FEES)
FY 2003-04 – $15.4 billion ($4.9 billion, $5.1 billion, $5.4 billion)
FY 2004-05 – $16.8 billion ($5.2 billion, $5.7 billion, $5.9 billion)
FY 2005-06 – $18.0 billion ($5.6 billion,$6.2 billion, $6.2 billion)
FY 2006-07 – $19.2 billion ($6.1 billion, $6.5 billion, $6.6 billion)
FY 2007-08 – $20.2 billion ($6.7 billion, $6.9 billion, $6.6 billion)
FY 2008-09 – $20.8 billion ($6.7 billion, $7.1 billion, $7.0 billion)
FY 2009-10 – $20.7 billion ($5.7 billion, $7.8 billion, $7.2 billion)

Anyway, the choices confronting lawmakers in the coming two budget cycles are simple – they can either a) cut government spending or b) raise taxes and fees.

It’s as simple as that.

Sadly, instead of reigning in excess government growth, South Carolina leaders want to nickel and dime an already battered and bleeding citizenry.

Anyway, as promised, count on FITS to keep an eye out for these tax and fee increases as we see them …

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