SC

Nikki Haley Wants Massive Tax Swap

GOVERNOR’S PROPOSAL RIPPED BY CONSERVATIVES || By FITSNEWS || During her first term as governor of South Carolina, Nikki Haley advanced a fiscally liberal agenda on taxes, spending, education and (most notably) government-subsidized health care … but she never specifically proposed raising taxes. Until now … Haley – who previously vowed to veto any gas tax increase – now wants…

GOVERNOR’S PROPOSAL RIPPED BY CONSERVATIVES

|| By FITSNEWS || During her first term as governor of South Carolina, Nikki Haley advanced a fiscally liberal agenda on taxesspendingeducation and (most notably) government-subsidized health care … but she never specifically proposed raising taxes.

Until now …

Haley – who previously vowed to veto any gas tax increase – now wants to raise the state’s 16.75-cent levy on fuel by ten cents (a sixty percent increase) and dedicate the revenues exclusively to infrastructure improvements.  According to her office, that would bring in an estimated $3 billion over the next decade.  In conjunction with the gas tax hike, Haley wants to gradually reduce the state’s top marginal income tax rate over the next decade from seven to five percent (a thirty percent decrease).

The individual income tax is the levy paid by most small businesses in South Carolina – and Haley claims her plan would result in $8.5 billion in savings for them and individual taxpayers (making her plan a net tax reduction of $5.5 billion over the next ten years).

Assuming you believe her numbers … (we don’t).

In addition to the tax swap, Haley demanded “reform” of the S.C. Department of Transportation – an agency she’s been in charge of for the last five years (and which was supposed to have been “reformed” under her predecessor, Mark Sanford).

“I hope everyone listened carefully to what I said,” Haley told legislators during her 2015 State of the State speech.  “This is a three-part package deal. In order to get my signature on any gas tax increase, we need to restructure the DOT, and we need to cut our state income tax by two percent.”

Haley claimed her plan would represent “one of the largest tax cuts in South Carolina history.”

But would it?

Real reformers were highly skeptical upon hearing Haley’s proposal.

“Folks are pretty upset,” the state director of Americans for Prosperity told The (Charleston, S.C.) Post and Courier. “They really feel misled. I think there’s going to be a lot of opposition.”

We agree …

ASHLEY LANDESS
ASHLEY LANDESS

“It sounds like voodoo economics from an intern,” said S.C. Policy Council president Ashley Landess – whose organization has long advocated for broad-based tax cuts, not tax swaps.

According to Landess, “tax swaps don’t work even when the money is traded in the same year – much less this (nonsense).”

She specifically referred us to Act 388 – a disastrous property tax-sales tax swap approved by state lawmakers in 2006.  That deal exchanged temporary relief on property tax rates in exchange for permanent higher sales taxes as well as additional property taxes on businesses, second homes, and industrial and manufacturing properties.

“The net result of ‘tax swaps’ is ALWAYS a net increase in burden because the goal is not to cut taxes overall as it should be,” Landess told FITS.

We agree …

“If gas prices spike, then revenue will drop,” Landess added.  “What then? Doubt they’ll be cutting income taxes in (the fourth year) in that scenario if they’re basing all this on revenue.  These projections just aren’t all that reliable.”

We agree …

Haley’s plan – which would reduce income tax rates by one-fifth of one percent each year – stands in stark contrast to the tax cut proposal offered last year by S.C. Sen. Katrina Shealy.  Under Shealy’s plan, the individual income tax would be eliminated over a five-year period – which amounts to 1.4 percent annual reduction in the oppressive levy.

That’s seven times the annual tax relief Haley is proposing …

Also, Shealy’s plan wouldn’t raise any other taxes – making it a pure tax cut (one that would stimulate the state’s consumer economy and create jobs, as opposed to relying on botched government efforts to purchase them).

Earlier this year, Haley’s “Republican” allies in the S.C. General Assembly unveiled their own tax swap plan.  We panned it … just as we are now panning Haley’s.

South Carolina does have an infrastructure problem, don’t get us wrong – but the problem isn’t due to a lack of revenue, it’s due to the fact Haley and state lawmakers have been growing government in all the wrong places.

Last week we wrote a lengthy column addressing this issue in more detail.   In light of Haley’s proposal, we would call your attention to the final few graphs of that piece …

Look: Infrastructure IS a core function of government.  And there clearly ARE critical infrastructure needs in South Carolina.  And the failure of our “Republican” leaders to address those needs IS costing motorists money.

But leaders need to address these issues by cutting unnecessary government – including unnecessary transportation projects.  Not by perpetuating the very system that’s landed us in this mess.

“While the Palmetto State’s roads and bridges crumble, its lawmakers continue to pass record-setting budgets,” we wrote earlier this month.  “Included therein?  Billions of dollars for South Carolina’s worst-in-the-nation government-run school system, its duplicative and inefficient higher education system, bailouts for wealthy corporations, shady ‘economic development‘ deals and … lest we forget … dozens of exorbitantly expensive and totally unnecessary highway projects.”

There’s plenty of money to make infrastructure a priority in South Carolina … our leaders are simply choosing not to.

Exactly …

South Carolina doesn’t need more tax swap gimmicks.  It needs real, long-overdue tax relief.  And real, long-overdue prioritization of government spending.  Neither Haley nor her “Republican” allies in the state legislature are offering anything resembling that right now.

***

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77 comments

vicupstate January 22, 2015 at 8:57 am

What is going to be cut by $5.5 billion to make up the difference?

Just more empty promises that will amount to nothing, while our roads continue to deteriorate.

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Flip Coscoe January 22, 2015 at 10:17 am

Another failed prediction by a failed political prognosticator.

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Smirks January 22, 2015 at 10:53 am

What is going to be cut by $5.5 billion to make up the difference?

Any program that helps the average guy. The remainder will be paid for by increasing regressive taxes.

A.K.A. “Fuck the poor.”

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Squishy123 January 22, 2015 at 9:04 am

I’d rather pay a tax on items purchased than income earned. At least then I have some control of how my tax dollars are collected.

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FastEddy23 January 22, 2015 at 9:27 am

Of course you would … Me too. BUT the case is not being made yet that taxes should be increased at all.

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Smirks January 22, 2015 at 10:50 am

Choosing not to purchase gas isn’t realistic for, well, a vast majority of South Carolinians.

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Squishy123 January 22, 2015 at 12:31 pm

Choosing how much to purchase is. Can SC uses combine trips, can they get a more fuel efficient vehicle, can they blah, bla, blah, ba fucking blah.

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PCAlum January 22, 2015 at 9:08 am

as a property owner, im perfectly ok with them increasing the gas tax to lower the property tax. i go through roughly 1 15 gallon tank of gas a week. that would be a 1.50 increase a week, or a $60 a year increase. lowering my property tax even 1% would save me that much if not more.

its the same logic CPA used to convince me the penny tax for buses wasnt a bad idea. everyone is going to buy stuff, not everyone owns property. if the penny tax had failed property tax would have gone up.

SPEAKING OF THE BUS TAX: HOW MUCH DID IT COST TO PUT IN ALL THOSE NEW BUS STOP SIGNS? I THOUGHT THEY BARELY HAD ENOUGH MONEY TO OPERATE AND NOW THEY GET NEW BRIGHT AND COLORFUL SIGNS EVERYWHERE?

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The Colonel January 22, 2015 at 9:08 am

They go with the bright colorful new buses…

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PCAlum January 22, 2015 at 9:11 am

ah of course, they have to match. certainly the new signs are doing part of their intended duty, i notice HOW MANY bus stops there are all over the place, they could probably remove every other one and become a much more efficient system, most gas is used by the busses re-accelerating after a stop.

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FastEddy23 January 22, 2015 at 9:48 am

We have dozens of colorful empty busses in Taxifornia too. … which are all too often used to justify increasing “infrastructure” costs.

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FastEddy23 January 22, 2015 at 9:47 am

… and all those extra signs? More distracting than cell phones, fur sure = more fender benders.

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The Colonel January 22, 2015 at 9:08 am

Skip the tax cut for now and add the 10 cents – if and only if every frigging dollar goes directly to road repair. Not construction, not rainy day funds, not overhead or administration – to repair.

Won’t happen, the plan is a non-starter anyway.

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FastEddy23 January 22, 2015 at 9:36 am

Ain’t ever happened yet … Never in history has increasing taxes been successfully raised AND targeted to a specific task … Creating meatballism and Central Planning screw-ups will never give up their 25% distractions … First thing you know the taxsuckers will divert too much to stupid projects … Like, “how about high speed rail?”, the 19th century solution to 21st century needs.

That’s what is happening out here in Taxifornia… Half-Fast “high speed” passenger services competing with the airlines, which are more than twice as fast at 1/25th of the cost to the taxpayers … and it was justified by a 50 cent a gallon “hidden” tax and overt expensive bond issues.

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Flip Coscoe January 22, 2015 at 10:13 am

Assuming you believe her numbers … (we don’t).
Read more at https://www.fitsnews.com/2015/01/22/nikki-haley-wants-massive-tax-swap/#mRugD06KB0bJVYMO.99

Do you REALLY think Nikki gives a shit what FITS thinks about ANY subject?

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Smirks January 22, 2015 at 10:47 am

Nope, but then again, does she care what any of the voters think?

She didn’t run on increasing taxes, but she doesn’t have to run again, so fuck it!

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The Colonel January 22, 2015 at 11:28 am

I known “…because she won both of them…”

Flip Coscoe January 22, 2015 at 11:37 am

She is lowering taxes,building roads and taking care of the voters.

Rocky January 22, 2015 at 1:26 pm

What roads? Last time I checked I-95 is still a traffic jam.

Smirks January 22, 2015 at 10:43 am

Skip the tax cut for now and add the 10 cents – if and only if every frigging dollar goes directly to road repair.

Supposing every last red cent of this increase goes to road maintenance, what stops DOT from spending every last red cent of the other revenue on anything but?

Might result in a slight increase in road maintenance, but a LOT more boondoggles.

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The Colonel January 22, 2015 at 11:39 am

The complicated version of what I’d like to see happen is all tax dollars go to road maintenance with no new overhead or construction initiated. If they want to build a new road, DOT should submit an annual “new construction” plan and the State House should vote it up or down and then make sure the funding was there – no funding, no new road and maintenance continues unabated.. If they (DOT) had an ounce of self control and a modicum of common sense, that wouldn’t be necessary

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Vince Nicholson January 22, 2015 at 12:59 pm

Colonel frag, how are you ? Looks like your buddy Nikki is getting ready to make millions more for her presidential campaign. Jindal just shit his pants !

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Rocky January 22, 2015 at 1:26 pm

He does that anyway.

FastEddy23 January 22, 2015 at 9:24 am

So, what’s wrong with dumping the state income tax altogether? Because the Feds would just jump in and take up that slack, raising the fed income taxes. … It is lower fuel and food costs that allow the poor and middle classes to get to work, so forget about it.

Both sales taxes and fuel taxes do more harm to the middle classes and to the poor than any capital gains or income taxes on the rich. Those rich who could easily afford it, would have no problems paying increasing sales and fuel taxes. Those rich who would have a problem with increasing sales and fuel taxes would simply move their businesses out of state (again, even more so).

FIRST, cut that income tax, THen CONSIDER increasing fuel taxes … It might just turn out that South Carolina becomes a destination for tourists AND business and total state revenues might just increase … Without any tax increases at all.

(This is the John F. Kennedy school of taxes. He cut the income taxes on the rich and, low and behold, fed tax revenue increased … !)

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vicupstate January 22, 2015 at 9:40 am

Feds can’t raise income taxes just on one state. Are you willing to cut pay for state troopers, throw peopl out of nursing homes and stop inspecting elevators, bridges, etc. in order to eliminate income taxes.

Your post is nothing but nutty drivel.

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FastEddy23 January 22, 2015 at 10:02 am

Feds can’t ?? Wanna bet ?? Oh Bummer ??

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Yep! January 22, 2015 at 10:13 am

Great point! The Feds can literally do whatever they want and call it “General Welfare clause” when they are sued in their own courts.

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FastEddy23 January 23, 2015 at 12:18 pm

Can and Do.

vicupstate January 22, 2015 at 4:56 pm

Provide an example where Federal taxes were imposed or raised on one state or a group of states, and not the others.

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FastEddy23 January 23, 2015 at 12:11 pm

Taxifornia, for one! G’ment employees in Taxifornia get almost “free” pensions and “free” medical bennies and full state income tax deductions for both. Same as in New York. Texas? Not! … Any other state with a state income tax on the private sector? Not!

vicupstate January 23, 2015 at 12:36 pm

I guess you don’t understand the meaning of the word ‘Federal’

FastEddy23 January 23, 2015 at 1:17 pm

Perhaps I should just stick to taxsuckers as the catch all for any fed spew, beltway bandit scams or retarded “progressive” mouthwash.

mamatiger92 January 22, 2015 at 9:33 am

“It sounds like voodoo economics from an intern.”

Love it.

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Sharon January 22, 2015 at 9:40 am

Dear Leader Haley knows that SC Voters are idiots and will support anything she says even though they know everything she says is smoke and mirror bullshit.

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No Returns January 22, 2015 at 9:53 am

LOL! You re-elected her, easily. Maybe next time, you great political minds should leave your computer rooms and go and actually vote. You sound pretty dumb bitching about her now.

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Flip Coscoe January 22, 2015 at 10:15 am

Damn right!!!!! NIKKI NIKKI NIKKI NIKKI!!!!

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No Returns January 22, 2015 at 10:27 am

I assume you’re one of the suckers who voted for her? You get what you deserve SC…

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jimlewisowb January 22, 2015 at 10:29 am

Is that what you scream when Grand Tangorrhea whacks you off

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Flip Coscoe January 22, 2015 at 12:44 pm

You drunk already? Wings and Yangalang for breakfast?

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jimlewisowb January 22, 2015 at 1:01 pm

Dear Lip

It is either Yuengling or Ying Ling. “Yangalang” is what you and Grand Tangorrhea scream at each other – hey if you suck my lang I’ll tongue your yang

Flip Coscoe January 22, 2015 at 1:11 pm

Thanks for answering my question. :-)

jimlewisowb January 22, 2015 at 1:17 pm

you are welcome

mamatiger92 January 22, 2015 at 10:29 am

you support this asinine tax swap idea?

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Flip Coscoe January 22, 2015 at 10:40 am

I actually do support it. Too many people are NOT paying income taxes (state or federal). If you are receiving food stamps,Medicaid or any other benefit from the perpetual welfare system and not paying state or federal income taxes you are NOT paying your ‘fair share’ .

I am for a ‘flat tax’ and ‘user fees’ on gas ,groceries, booze,cigs and abortion services.

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Rocky January 22, 2015 at 1:27 pm

Easy buddy – Main Street it Crapville is full of potholes and without those Welfare checks the Crapville Cracker Barrell would go out of business.

Smirks January 22, 2015 at 10:49 am

He’s paid to.

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Flip Coscoe January 22, 2015 at 11:39 am

I wish-however we now know Tehran is paying Obama!

Saw it coming January 22, 2015 at 9:58 am

Conservatives trying to justify the fuel tax increase, while glossing over the fact Haley campaigned that her super secret plan would involve no tax increases. Haha, she had no plan, except future aspirations outside of SC.

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FastEddy23 January 22, 2015 at 10:03 am

Not! … How about a tax cut instead?

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Saw it coming January 22, 2015 at 10:16 am

I don’t know what you’re talking about. I know Haley said no gas tax increase and she proposed one that will essentially be revenue neutral. Which leads back to original issue, of paying for the roads. Not sure what Feds have to do with any of this.

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FastEddy23 January 22, 2015 at 1:09 pm

“… she proposed one that will essentially be revenue neutral. …”

Never in history has any tax increase been revenue neutral … ever.

Any chance of the feds boosting road repair finding are slim and none. They have all of those Half-Fast “high speed” rail projects to promote and pay for.

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Correctomundo! January 22, 2015 at 3:13 pm

“Never in history has any tax increase been revenue neutral … ever.”

Amen.

This BS line is always cover for more taxes. If it was simply a matter of appropriation then the pols could do it in the budgeting process.

jimlewisowb January 22, 2015 at 10:03 am

“…..dedicate the revenues exclusively to infrastructure…..”

Translation: Cockroaches are going to bugger taxpayers until their money falls out of their pockets and then spend the money on themselves

Fucking Cockroaches

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Haley Special Olympics January 22, 2015 at 10:03 am

Her argument is self defeating.

“We need to raise money for an agency that needs reform that I’m already responsible for….”

That’s some friggin crazy talk right there.

I can’t believe how many people are willing to give money to an agency that can’t produce a complete accounting of the money it already gets…including our glory hole Governor. She even acknowledges the SCDOT is not working properly!

Paramount stupidity/incompetence from top to bottom.

The very first think that needs to happen to the SCDOT is an audit from top to bottom to see where the money it gets already is going now.

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Beartrkkr January 22, 2015 at 11:51 pm

The money is going where the politicians tell it to go…that ain’t rocket science. The heart of DOT’s woes rest solely on the politicians and political appointees. Their mantra seems to be “why fix old roads when we can build new ones…”

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ted January 22, 2015 at 10:30 am

Did Nalin write that speech?

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sparklecity January 22, 2015 at 10:31 am

Even prior to “Act 338” legislators representing the “Great state” of South Carolina lowered property taxes which immediately resulted in counties raising other taxes or implementing “fees” to individuals to make up the difference in what they were getting from the “great state’ of South Carolina.
*******The $25 per vehicle road “fee” implemented by Spartanburg County was a direct result of state legislators playing a “shell game”****************** I know, I went to the county meetings to voice my opposition to the road “fee” in front of County Council
*********The vehicle taxes on two of my vehicles went up 300% as a result of our great state legislators giving me a “break”*********
And as we know a lot of counties sales taxes went up for road “improvement” as a result of legislators meddling with this bullshit.

Besides that, what if gas goes up and more people buy hybrids in addition to vehicle getting better gas mileage as has been the case over the last 5 -10 years and the gas is taxed per gallon?
I am aware that NC and other states are looking to tax hybrids/electric cars by taxing the electric metering during charges.

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tomstickler January 22, 2015 at 11:10 am

“Shell game” was my immediate take on this proposal. Keep your eye on the pea.

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sparklecity January 22, 2015 at 12:28 pm

Noticed your picture a number of times.
Are you a canyon carver and/or ride the “Dragon’s Tail”?

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tomstickler January 22, 2015 at 10:53 pm

That avatar is on the Dragon @ Gravity Cavity.

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sparklecity January 23, 2015 at 1:04 pm

That you riding?

tomstickler January 23, 2015 at 7:04 pm

Of course: doesn’t everyone use their own pic for their avatar?

Dan Ruck January 22, 2015 at 10:34 am

Good column, FITS. Other states have higher gas taxes yet manage to do better than SC. My only beef is with cutting taxes for the rich while raising gas taxes for the poor. It’s the old flat tax scam. Poor spend much more of their disposable income on gas than do the rich. It’s the poor who need a tax break, not the rich. But don’t listen to me. I just speak for the 47 percent, not the 1 percent who get the ear of Nikki.

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Smirks January 22, 2015 at 10:55 am

ITT: Even liberals think this is a dumb idea, meanwhile Haley loyalists line up in droves to support this “much needed” tax-and-spend brain fart.

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Manray9 January 22, 2015 at 11:11 am

Sounds like typical Republican hogwash to me: tax breaks for the rich and a tax increase for consumers. This is news? The people must want it, huh? They re-elected her.

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Bible Thumper January 22, 2015 at 11:29 am

The gas tax raises revenue from everybody who uses our roads. Out of state travelers will be purchasing gas in our state and paying the tax.

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vicupstate January 22, 2015 at 4:58 pm

Indeed. It is a user fee, and therefore is a very good and appropriate way to pay for roads.

You can always walk, bike, carpool or buy a more gas efficient car if you want to reduce your tax burden, so there is at least some means to control what you pay.

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dm10ae January 22, 2015 at 12:52 pm

The state had a SHIMS (3cents gas tax)program which stood for state highway improvement and maintenance system-which legislators robbed to place into general fund. How can we be sure the legislators will not do that again? They “borrowed” from health care fund $25 million during Sanford’s reign and resulted in increased premiums and lower coverage-believe any of these legislators you’ll be fooled.

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Yep! January 22, 2015 at 3:15 pm

Love this post, shows all that’s wrong with the system and the current attempt at bamboozlement.

+100

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Rocky January 22, 2015 at 1:12 pm

This whole plan sounds like “I will gladly pay you on Tuesady – for a nice hamburger today!”

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snickering January 22, 2015 at 1:42 pm

Exactly Will. Good Work.

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K.Mann January 22, 2015 at 1:49 pm

The SC DOT reminds me of Solyndra (the solar energy company that the federal government gave millions of dollars to… Every time Solyndra misspent money, the federal government gave them millions more.) How about addressing the waste and poor administration *first*… For example, there’s the reputed collusion among contractors (who, it’s said, do not engage in competitive bidding against one another and are rewarded with having work subcontracted to them), and the asinine practice of buying property along busy roads only after they’ve been heavily developed so that five times as much has to be paid to the property owners. Other states, like GA, can manage a bit of forethought, so why can’t we? And doing some investigation into when some of the worst roads were paved, because some contractors do shoddier work than others. If a road is full of potholes a few years after paving, the company responsible should not get any more state contracts (or subcontracts!) There are portions of I-95 in Virginia which have lasted 50 years or more because it was put down properly. Finally, we can do away with those silly “dedication” signs which dub every ten mile stretch of road, bridge and intersection in memory of someone or another. They’re expensive to make, maintain and now around; little more than vanity plates for politicians, and are confusing to travelers looking for real directional road signs.

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Regina January 22, 2015 at 3:10 pm

Haley skipped another disturbing proposal percolating in the capital to tax cell phone users. She should have taken the opportunity to say that S277 doesn’t have a chance. Why on earth would we want to tax all cell phone users and then give the money to corporations providing traditional landline service?

I learned about this from Forbes yesterday, and really wish that Haley had taken this on (and still hope she’ll do so)

Forbes article here: http://www.greenvilleonline.com/story/opinion/contributors/2015/01/21/steve-forbes-cell-phone-taxes-hurt-consumers/22116615/

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henrymore January 22, 2015 at 6:16 pm

I would normally be in the camp of no on a tax swap since I agree with FITS and most on here that 388 was a disaster. But this one I don’t mind and support. The past couple of years the legislature has been content taking the “surplus” in the general fund and putting this towards roads either directly or by bonding it. This so called “surplus” in the general fund is 100% from South Carolina taxpayers and clearly shows we are over taxed on income and property. This swap lowers this tax that is paid by all South Carolina citizens.

A swap that lowers the income tax for a gas tax hike is a good investment for SC taxpayers. Estimates show about 35% to 40% of gas tax revenues are paid by out of state drivers. If our roads need investment and anyone with a car knows they do, we should use a source of revenue that is not 100% on the backs of South Carolinians. Planning roads and maintaining them in a smart way takes long term planning with fairly certain revenue predictions for what are very long term investments in infrastructure. This planning can’t occur when increases in the road budget are at the whim of the legislature when the “surplus” presents itself. The gas tax has its imperfections but it is the closest direct link to our roads and is clearly a use tax that needs to go up to maintain our infrastructure.

Neither FITS nor a single commenter I saw have mentioned this out of state versus completely on the backs of our citizens issue.

While it is a swap, it is swap that benefits the wallets of people in South Carolina and our roads and forces those that use it to pay for it.

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BC January 23, 2015 at 3:04 am

Nikki Haley, once again proved she has no solutions, or real ideas to solve South Carolina problems especially our crumbling roads and bridges. Nikki Haley and legislators are going to continue to do nothing until industry and companies bypass South Carolina for other States who have and offer solutions to problems. Industry leaders have already been quoted as saying if South Carolina does nothing to fix the problems they have they will have to look else where for expansion and growth. Nikki Haley in particular does not care about South Carolina, Nikki Haley cares about Nikki Haley and furthering her political aspirations. South Carolina once again showed their stupidity in electing Nikki Haley, just like they have done with reelection the “love governor” Mark Sanford, and other useless self serving politicians and crooks.

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BC January 23, 2015 at 3:07 am

Instead of “its a great day in South Carolina”, it is in all truthfulness a sad day in South Carolina.

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Tom January 23, 2015 at 6:13 pm

Typical Republican plan. Cut taxes on the richest and increase taxes on everyone else to pay for it. Why would we be surprised. Its what I Republicans have been doing every where they are elected. Its what the Koch brothers are paying them to do.

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