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Nancy Yates: Is South Carolina Really “Best For Business?”




|| By NANCY YATES || Browsing through my morning news earlier this week, a headline captured my attention.  “Georgia, South Carolina rank No. 1, 2 in best places for business,” it proclaimed.

Anxious to read some good tidings for a change, I put down my stale morning coffee and swallowed the click bait.

This was going to be great news! Right?

The article I clicked on challenged everything I’ve come to learn about comprehensive tax reform – and South Carolina’s business tax climate.  So I eagerly scrolled through, read and re-read – scanning it closely for source-based validation.

The article was loosely sourced, but that didn’t hinder my enthusiasm when I read highlights: “30th annual survey,” “national publication,” “executives,” and of course the publication itself, Area Development Magazine.

Surely these folks know more than I do?  They’ve been doing this for thirty years.

Soon, though, I realized I had stepped onto the set of “House Of Lies.”  A real-life Marty Kaan couldn’t have done a better job spinning that headline.

The original article buries the lede deep in its body, that “South Carolina ranked first in business incentives programs.”

The survey upon which this claim is predicated comes from “unbiased” and “in-the-know consultants” who also proclaim that “South Carolina ranks second, on the strength of its incentives, business-friendly government and permitting processes, and overall cost of doing business. The tax environment gets high marks, and no wonder – the corporate income tax rate is 5 percent, and there are no state property taxes, inventory taxes, local income taxes, taxes on manufacturing equipment or materials for finished products, nor wholesale taxes.”

For all you other business owners out there, this is what the S.C. Department of Revenue (SCDOR) has to say:

Property tax is administered and collected by local governments, with assistance from the SCDOR. Real and personal property are subject to the tax. Approximately two-thirds of county-levied property taxes are used to support public education. Municipalities levy a tax on property situated within the limits of the municipality for services provided by the municipality. The tax is paid by individuals, corporations, partnerships, etc. who own property within the state.

While I can agree with well-conceptualized business tax incentives to draw new business to the state, I also believe it is worthwhile to put things in context using your favorite source. Such as this (or my personal favorite tax policy website).

As for the original article, I rate it mostly bull dust.  I also question who is getting paid to make the case that incentive-based business development makes South Carolina the No. 2 state in the nation for all businesses.

Considering the tax burden placed on small businesses and their employees – those pesky little drivers who propel our economy forward, I would argue there is a lot more to this story.  As we move forward with economic development in the Palmetto State, let’s not forget the little guys who do not benefit from such lucrative incentives.

Nancy Yates is a resident of the South Carolina Upstate.  You can follow her on Facebook here.

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(Banner image via iStock)