SC

Another SC Grocery Tax Hike Proposed

“REPUBLICAN” LAWMAKER FILES TAX SHIFT BILL S.C. Rep. Kit Spires doesn’t think senior citizens should have to pay property taxes. In fact he’s so adamant about it, he’s proposing to raise the state’s grocery tax so that they don’t have to. Spires’ proposed tax shift – which the Lexington lawmaker…

“REPUBLICAN” LAWMAKER FILES TAX SHIFT BILL

S.C. Rep. Kit Spires doesn’t think senior citizens should have to pay property taxes. In fact he’s so adamant about it, he’s proposing to raise the state’s grocery tax so that they don’t have to.

Spires’ proposed tax shift – which the Lexington lawmaker pre-filed earlier this week – would further convolute and complicate what is already one of the most confusing, corrupt tax codes in the nation.  It would also do nothing to materially enhance our state’s economic competitiveness.  Furthermore his proposal – like a similar tax swap abandoned two years ago by S.C. Gov. Nikki Haley –  proves that South Carolina Republicans remain enslaved to the doctrine of “revenue neutrality.”

For those of you unfamiliar with this doctrine, “revenue neutrality” insists tax cuts occur in a vacuum – and any dollar added to the private sector side of the ledger must necessarily be subtracted from government.  This is why fiscally liberal politicians, bureaucrats and mainstream media reporters insist tax cuts must be “paid for,” which is a patently ridiculous statement.

Think about it … if government “pays for” a tax cut with a separate tax increase, that’s not a tax cut.  It’s a tax swap.

Also, not all taxes are created equal.  While virtually every tax cut has a stimulative effect on the economy, specific tax cuts – most notably individual income tax relief – have  proven effective at creating jobs and raising income levels.

Spires clearly doesn’t get that … but then again neither does Haley.

Tax swaps like this one are disastrous ideas – as evidenced by the ongoing debacle associated with an ill-conceived 2006 sales tax hike/ property tax cut (the infamous Act 388).  Then there are the crony capitalist tax swaps that our leaders cleverly disguise as “economic development” – corporate giveaways which do nothing but shift the tax burden from select, politically connected companies onto the backs of small businesses.

Making matters even worse, South Carolina’s tax code is littered with anti-competitive exemptions – including $13 million that goes directly to the state’s mainstream media (a glorified bribe if we’ve ever seen one).

This is no way to build a competitive business climate, people … and each year new swaps like this one only further entangle an already huge knot.

When it comes to taxes and spending we would humbly submit it’s time for South Carolina to start over – starting with fundamental reassessment of what government’s role in our state ought to be.  Until a list of core government functions has been drawn up and agreed upon, a discussion as to the optimum method of taxation is pointless.

One thing we do know, though … this ongoing belief that the state must raise a tax in order to cut one clearly hasn’t worked out so well.

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28 comments

sweepin December 21, 2012 at 12:46 pm

There is no tax known to man that is as regressive as a sales tax on groceries (food). I suppose a sales tax on the air we breathe or the water we pump from the ground or reservoirs would rival it or slightly exceed its regressiveness. Theoretically one would die of oxygen starvation or water dehydration before one would starve to death, all other things being equal.

Some of these morons need a 100 level course in Economics or even better, a 300 level course in “Government Finance and Taxation.”

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? December 21, 2012 at 2:15 pm

lol, I enjoyed your comment.

Thing you must know by now though: there is no such thing as a “bad tax” for 90% of pols.

In their mind they’ll tax groceries so they can help feed people.

:)

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Thinker December 21, 2012 at 2:23 pm

Actually, if you take a governmental taxation class, you can lower the rate of taxing by increasing the tax base. FYI

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Jan December 21, 2012 at 2:24 pm

You forgot the current US Income Tax Code, which taxes working couples with taxable income over $17,500 a year at a higher marginal rate than Mitt Romney.

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? December 21, 2012 at 2:34 pm

Good point Jan, Thinker is also still missing the “regressive” part.

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sweepin December 21, 2012 at 2:59 pm

Thinker didn’t have L.M. “Frosty” Bauknight for Ag Econ 352, Government Finance.

He would have caught the “regressive” focus of my post.

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Thinker December 21, 2012 at 6:23 pm

I caught the regressive, I’m just pointing out the positive of the increased tax base. I took Politics of taxing and spending.

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? December 21, 2012 at 6:26 pm

Don’t be a stinker, Thinker-it’s the holiday’s for crying out loud.

You can’t lower taxes on the lower income people enough to make up for the increased taxes on their groceries…especially if they are already paying “zero” in income tax.

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Thinker December 21, 2012 at 6:35 pm

I’m just stating the obvious here. It is true, if you widen the base, rates can be lowered. We should be more concerned about the Milk prices about to go up to 6 bucks per gallon because of our incapacitated Congress.

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? December 21, 2012 at 7:38 pm

Milk isn’t going up because of an “incapacitated Congress”, if anything it’s going up because they haven’t been incapacitated for 42 years.

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sweepin December 21, 2012 at 9:05 pm

Correction:

Ag Econ 352, Public Finance; Professor L.M. “Frosty” Bauknight; MS Ag. Econ.; Clemson University. A Clemson “legend in his own time.”

As to milk prices at $6.00 due to incapacitated Congress: we did away with “Milk Boards” and controlled production and pricing of milk pricing in the 1980’s. Congress, nor states have a damn thing to do with milk pricing. Prior to that, Ag Econ. 309, Economics of Agricultural Marketing, pointed out the theoretical plus’s to controlled agricultural production, but the practical silliness of the same. In fact, per capita milk consumption has reached record low levels in recent years and continues to trend downward. Unlike most agricultural production of the recent decade, milk production and meat production has not been a “printing press” as have oilseeds, foodgrains, feedgrains, fibers, and damningly, ethanol subsidy fueled corn production (fuelgrain or follygrain?).

Further, should Congress fail to act on our budget issues, a more likely consequence will not be agricultural price inflation, but instead, agricultural price deflation, much like that of the 1920’s and 1930’s when US farmers were producing in surplus for a market that suffered from shrinking demand at home and simultaneously, lagging European demand that had previously propelled production and prices in the US Agricultural sector during and immediately after WWI. Europe had little capacity to produce foodstuffs at the end of the WWI.

To add, energy consumption (ethanol) will decline, discretionary consumption of fancy foodstuffs (cheese, pastries, other value added products), fiber consumption (underwear and other 100% cotton fiber products),and US exports (worldwide decline in consumption of those dependent on the US economic engine) will also decline. We will, once again, find ourselves re-invested in the “race to the bottom” with China, Vietnam, South America, and other developing economies whose labor costs represent those of subsistence wages.

Finally, I am well versed in broadening the tax base and its effect on tax rates. I happen to agree with the concept. Note my comment below on manufacturing exemptions. However, that has absolutely nothing to do with the regressive nature of sales tax on food, which third in importance only to air and water, respectively, falls heaviest on the poorest among us, including the poverty stricken due to illness, disability, lack of education, skills, etc. Not to mention those on fixed income, particularly those with poverty level incomes, whether fixed investment returns, entitlement fixed income, or market earned wage income.

Sign me,

Several Degrees: Farm Boy Hard Knocks; Capitol Hill Political Tax and Spend; BS, a Biological Science, Clemson; BS, Ag. Econ., Clemson; Multiple Privately Owned and Held Business(s) Management and Entrepreneurial Reality; and, perhaps most importantly and impressively, Message Board Smartass.

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? December 21, 2012 at 10:04 pm

Btw, this is a nice write for both sweepin & Thinker on the “milk cliff” from one of my favorite economic blogs:

economicpolicyjournal.com/2012/12/why-milk-prices-could-more-than-double.html

It’s interesting to see the effects gov’t intervention can have on things like milk. How sad is it that it may become the largest reason for a dramatic increase? (to the detriment of poor people especially)

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Bob Hall December 21, 2012 at 1:17 pm

First, please knock off the garbage about the tax exemption for what you call mainstream media. It makes you seem like a whinnnner. It is only one of many injustices imposed to us by our elected by the people paid for by special interests. Why not spend your time raising money from all the “non” main stream media outlets and lobby to have it changed. You knew the rules when you got into the game.

But back to taxes on groceries so the seniors can be expemted from property taxes: First let me tell you I am 73, retired after many years in a large business environment followed by owning a couple of businesses. I was born in SC and served more than four years in the military.

I can not name a single thing in my career that has earned me the right not to pay property taxes like everyone else. The same applies to certain select businesses that appear to get exemptions.

Yes, I it has been more of an effort to spend the last 30 to 40 years in this laughing stock state than it would have been to do so somewhere else but I fail to see where this has earned myself or anyone else special consideration. THis applies to taxes and other special arrangements such as separate Senior Centers in Lexington County instead of joint Recreation/leisure/senior buildings. I want anyone to explain to me why we seniors need for the younger generation to support us with their taxes.

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south mauldin December 21, 2012 at 1:34 pm

Well said.

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sweepin December 21, 2012 at 3:00 pm

+1

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Knotts December 22, 2012 at 4:58 am

Well said and you are correct if there is a way for Lexington County to waste money they’ll find it. The county council there has never seen a tax increase or worthless project they didn’t vote for. They seem to think that because people live there they all have money and all want to spend it recklessly. Year after year the residents there miss an opportunity to elect a pragmatic and fiscally astute council. They get what they deserve in Lexington.

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Bamburger December 22, 2012 at 12:00 pm

Got that right! Man, this Collins guy they just elected is a real whack job. Sit back and watch the fun and listen to the screams when those Lexington nutcases get effed yet again.

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dwb619 December 21, 2012 at 2:00 pm

Geez, I suppose this RepubliJERK ,Spires, doesn’t hold to the TEA Party’s no more tax agenda.

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LD December 21, 2012 at 2:15 pm

Sales tax should not be in anyway related to property taxes.

Personally, I think they should do away with all exemptions related to sales tax except items purchased for resale and prescription drugs. There would also be no cap on automobiles (sales tax never stopped anyone from buying a new car) Personal services such as those provided by attorneys, accountants, engineers, etc. should also be subject to sales tax. Medical services would be excluded.

This would allow our sales tax rate to be around 3%.

There are so many abuses of the system in the areas of the agricultural exemption, manufacturing exemption and the automobile cap, this would be eliminate those.

This would also simplify the reporting. 30 years ago the sales tax report was on a coupon about the size of a check stub, now the monthly reports can be a dozen pages or more.

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sweepin December 21, 2012 at 2:55 pm

Don’t get me started on Manufacturer’s exemption. I sell capital equipment. Exemptions vary from one room or section in the plant to another.

I bill ’em all and make them sort it out for me. The Bill is fully satisfied until I have a letter of explanation. It’s a pain in the ass.

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Andy December 21, 2012 at 2:25 pm

I saw this knuckle dragger on TV saying that low income families who can’t afford a sales tax on groceries can go to food banks. Right, dipshit, just what we need from Columbia–policy that will drive people to food banks. Just when I think these jerkoffs cannot become more regressive, another day comes along. South Carolina was decades behind most states in the nation in getting rid of the tax on groceries and now this cretin wants to take us back. Our Governor floated this idea a while back but someone helped her come to her senses, inasmuch as that’s possible.

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? December 21, 2012 at 2:35 pm

Regressive, progressive-what’s the difference?

lol

:)

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Old Bike Dude December 21, 2012 at 3:45 pm

Act 388 , it’s new for The Jasper Port. Look for this and other myths to be greatly exaggerated in the coming months. Sic and Chemical Mick’s good buddy Tom needs it to incite the Sin City klan.

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sweepin December 21, 2012 at 9:23 pm

And while I’m on a rant, nothing is so sublimely ridiculous, assininely selfish, and genuinely oblivious to the hypocrisy of earning his income in an industry (pharma) whose sales are represented in the amount of 25% from government spending due to State and Federal entitlement programs, all while complaining about taxes paid by Senior citizens.

If he wants to give Seniors a break, let him lower prices of the meds, health aids, and other pharmacy provided products. Let the impractical SOB see how his Net bottom line would look with a 25% reduction in sales.

I’m through for the night. I intend to drink more wine, but abstain from more opinionating. They don’t mix after the 3rd or 4th glass.

Signed,

Message Board Smartass

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? December 21, 2012 at 9:49 pm

“Further, should Congress fail to act on our budget issues, a more likely consequence will not be agricultural price inflation, but instead, agricultural price deflation, much like that of the 1920?s and 1930?s when US farmers were producing in surplus for a market that suffered from shrinking demand at home and simultaneously”

Generally speaking, I like your rants. Carry on. I’m just sitting here sipping red win enjoying them.

You’re not the first to call for deflation in the face of a depression/recession.(see Mish Shedlock)

I personally disagree, especially given the Fed Reserve mandate of 2-3% inflation(according to CPI, which doesn’t include food among other things).

Money not being neutral, the now 85 or so billion a month they are printing will work its way into the system and show price inflation in some areas and not in others. I personally think(and so far history shows) that food will go up, just like real estate in CERTAIN markets is now going up as newly minted dollars leak out into the economy.

That’s why it’s a bitch for low income people, as they disproportionately spend more of their income on food.

For the record I hope you’re right and it’s “deflation”(as it’s easier on poor people), but I highly doubt it….and the recent history shows inflation.

The only reason meat is stumbling right now is due to the early sell off of cattle due to grain prices(drought). Watch what happens to cow meat prices in the 2nd half of 2013.

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shifty henry December 22, 2012 at 7:31 am

….. some people support a value added tax system

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norman December 22, 2012 at 12:50 pm

Why not look at what FL has done successfully for many years. No state income tax, no sales tax on groceries and pharmaceuticals. Put in para mutual betting.

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