FIGURES ARE “VERY DISCOURAGING”
“Today’s unemployment figures for South Carolina are very discouraging. In the past three months, our state’s unemployment rate has increased from 8.9 to 9.6 percent, more than three times the growth of the national rate. Meanwhile state average per capita income remains only at about 84 percent of the national average. In other words, compared with most other states, we have a substantially higher unemployment rate and the jobs we do have pay substantially less.
“This economic condition is the result of our state’s failed economic policy. There is far too much secretive top-down planning by state government officials – chasing specific companies and industries with taxpayer subsidies – and not nearly enough attention to the underlying business climate. Instead of making South Carolina a place where everyone has a fair shot at succeeding, we are favoring the politically well-connected. That’s neither fair nor good policy.
“The numbers bear this out. According to our state’s Board of Economic Advisors, the annual total amount of special “incentives” given annually by state government to “targeted” businesses grew from $35 million in 1998 to $525 million in 2008. And as shown on the attached graph by the Bureau of Economic Analysis, cited by the South Carolina Policy Council in “Unleashing Capitalism,” there is a direct correlation between the increase in state government’s interference in the marketplace and the decrease in our citizens’ average per capita income.
“Crony capitalism is rampant in Columbia. Because of nearly 100 special loopholes in the tax code, the state actually exempts more in sales taxes than it collects. Huge companies able to hire the right lobbyists get special laws passed so they can avoid collecting sales taxes altogether, whereas small businesses and mom-and-pops are forced to pay full freight. Chief Justice Toal was right when she said such amounts to a ‘tyrannical exercise of arbitrary power.’
“But the favoritism doesn’t stop there. Our state’s manufacturing and industrial tax assessment (10.5%) is the highest in the nation. Again, though, companies with the right connections can avoid these high property taxes by negotiating fee-in-lieu agreements with local governments. Everyone else must pay the high rate, and capital investment is discouraged.
“We need to end the corrupt politics of favoritism, close the loopholes and cut taxes across the board, so that all citizens and businesses pay lower taxes, not just the politically connected. South Carolina’s goal must be to become the freest state in the nation. Lower taxes for everyone will promote free-market entrepreneurship and discovery – the true sources of prosperity.”
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