S.C. tax proposal targets gasoline, groceries

Friday, Sept. 3, 2010 9:45 AM
Last updated 6:18 PM
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COLUMBIA – Legislators will consider a plan next year that would raise the gasoline tax in South Carolina by a nickel per gallon; begin taxing water, electricity and prescription drugs; and reinstate a grocery tax.

A panel studying taxes voted unanimously Thursday to recommend increasing the state gas tax to 21 cents per gallon to generate an additional $150 million yearly for road work. It also voted to add a 1.25 percent tax to water and electricity bills and prescription drugs, and to reinstate a tax on groceries at 2.95 percent. Unprepared food had been taxed at 5 percent before legislators cut it to 3 percent in 2006, then eliminated it in 2007.

The 10-member Tax Realignment Commission will finalize the rest of its report over several more meetings and send its recommendations to legislators, who created the panel last year as a way to overhaul South Carolina's tax system.

At the time, lawmakers said a comprehensive study was needed to avoid the piecemeal changes they usually pass, which can create unexpected problems. They also hoped to make it easier to eliminate or alter outdated tax exemptions, because attempts to toss any out singly provoke opposition from affected interest groups and kill the effort.

The state has more than 120 sales tax exemptions or caps, which the state's Board of Economic Advisors values at $2.8 billion. Dozens of those would be repealed or modified.

Recommendations from the commission, which began meeting last September, are sure to be met with resistance. For its proposal to become law, legislators must sponsor it as a bill, then muster majority approval in the House and Senate.

While it would lower the state's general sales tax rate from 6 percent to 5 percent, it would apply the tax to services that are currently exempt, such as hair cuts, computer repair and gyms. The idea of tacking on taxes to necessities has invited criticism.

"I can't imagine it passing," state Rep. Leon Starvinakis, D-Charleston, told The State newspaper of Columbia. "I consider myself a moderate person but I – and, I would think, most others – are not going to consider tax increases in this kind of economy. And I'm certainly not going to supports taxes on basic services."

GOP gubernatorial nominee Nikki Haley has said she favors restoring a tax on groceries.

"Look at that grocery sales tax. It didn't create the first job, not the first job, so that is something that's not being productive," she told The AP during the primary race, while laying out the need for comprehensive tax reform.

Democratic nominee Vincent Sheheen, who also calls for a tax overhaul, says he opposes taxing groceries. Neither will weigh in on the commission's other recommendations so far.

South Carolina's 16-cents-per-gallon gas tax, unchanged since 1987, is the nation's third-lowest and raises about $500 million yearly for road construction. But collections have been flat or shrinking, partly because of better fuel efficiency, and South Carolina ranks 49th in state support for road work, according to the commission.

"I don't think anyone would disagree the roads are in pretty bad shape," said commission member Kenneth Cosgrove.

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disssman
6
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disssman 09/03/10 - 10:17 am
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I wonder if this panel was

I wonder if this panel was composed of only :stakehoulders" or were there some common folks involved? I wonder why they don't have an increase in sales taxes luxury items of items that sell at considerably more than the average like clothing, tennis shoes, BMWs, high dollar wheel rim and expensive bass boats? For instance, If a market survey were conducted and blouses were selling for an average of 50 dollars, then one selling for 200 dollars would be taxed extra.

walrus4ever
354
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walrus4ever 09/03/10 - 10:20 am
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Theres a brilliant solution,

Theres a brilliant solution, jack up the taxes on businesses and drive them elsewhere. We have had several good paying employers locate here in the upstate recently at a time when jobs are scarce. A big reason that states like Ga are bypassed when new sites are considered.

baseballmom3
0
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baseballmom3 09/03/10 - 11:18 am
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So let's tax the people using

So let's tax the people using the gas driving to work so the ones that don't work can sit home and still make more than us that do work because we are working to pay for them to sit at home and draw a check out of the mail box. Sounds like a wonderful plan to me. Why don't you tax tobacco higher. Nothing against smokers, but a hugh majority are the poor and welfare. If they can afford tobacco then they should be able to afford to come off some welfare. You guys sound like the politicians in Augusta, continually raise the taxes on the homeowners and now the workers who use gas to drive to work. We need to have major welfare reform in this county first. If you can afford tobacco, lottery tickets, cable and cell phones, (all items that aren't necessities) then all of those things need to be deducted from your welfare checks. I just went and had my son's prescription for 90 days filled, after insurance it it was $490.00. Do I get a break on his meds, absolutely not because I according to the wonderful gov. we have make too much. So I pay my insurance costs and then the cost of the meds after. Yet if I didn't work I could sit home and get it all free. My insurance costs will go up again this year. I can see why the unemployment rate remains high, who would want to go to work when you get everything free all from the suckers out there getting out of bed at 5:00 in the morning to go to work to have the government redistribute my paycheck I work for. We need reform on everything on both sides of the isle. We the works are sick of working to hand the government our paychecks to throw away.

ruudvonbaron
0
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ruudvonbaron 09/03/10 - 11:26 am
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Here is an idea.......instead

Here is an idea.......instead of raising taxes cut the current $21Billion dollar SC state budget. Cut it in half. Force some personal responsibility onto the citizens.

faithson
5158
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faithson 09/03/10 - 12:03 pm
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you no-taxers are nuts...

you no-taxers are nuts... The money generated would go to transportation infrastructure. Just how the heck are these people supposed to get to work if the roads and bridges aren't taken care of. This kind of tax would put construction workers to work. I am sure the board that unanimously approved this idea of 5 cents more had the state of SC in mind. Paying the same tax since '87, seems like an increase may be in order. But oh yea, NOT MY MONEY the shortsighted self interested citizen says....

seabeau
33
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seabeau 09/03/10 - 12:16 pm
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South Carolina does have some

South Carolina does have some roads in terrible shape.

Techfan
6461
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Techfan 09/03/10 - 01:23 pm
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I recently read an article

I recently read an article about this, although I can't remember where. Gas taxes are used to fund transportation infrastructure, however, they are charged per gallon, not on the total price like the sales tax. As more people go to more fuel efficient vehicles, gas consumption is going down, which makes less funds available for road infrastructure. This is happening at both the state and federal level. Either the formula for funding roads, bridges, etc has to be changed or the taxes have to be raised.

justthefacts
21876
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justthefacts 09/03/10 - 01:29 pm
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I wonder if we could employ

I wonder if we could employ better management practices and spend the money more wisely?? Naw, that's crazy talk, raise the taxes on the dummies.

Chillen
17
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Chillen 09/03/10 - 01:48 pm
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Techfan, if that's true then

Techfan, if that's true then the taxing model definitely needs to be changed. Those who use more gas, but not necessarily more road time should not be forced to bear the brunt of the entire road expense. An electric car does as much road damage as a gas car.

The bottom line here is that the govt need to find the money that they need within their current budget and with their current tax revenue. Our governments are sitting with lots of extra staff, super pay, benefits & perks and state of the art buildings & technology. Not one person alive could possibly believe that govt expenses couldn't be trimmed at least 25%.

TrukinRanger
1748
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TrukinRanger 09/03/10 - 03:54 pm
0
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I guess we will have to go to
Unpublished

I guess we will have to go to a system that was used in Britain. Lower the sales tax and charge a yearly road tax.

follower
59
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follower 09/03/10 - 05:32 pm
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disssman, taxing luxury items

disssman, taxing luxury items was tried in 1993, and it brought the boat industry to it's knees. Remember that BMW is a major employer in the state and the ancillary businesses attached to it would certainly cause more economic harm than any tax would raise.

A modest gas tax increase is as fair as it gets. SC already has the lowest fuel tax in the nation [pretty sure that's correct] and the condition of the roads show it.

I don't like tax increases any more than the next guy, but at least this one would tax the user. Of course, as several posted above, better oversight should always be the first step. Don't know the percentage of waste, but I imagine 10% is probably on the low side.

scredsfan
2
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scredsfan 09/03/10 - 06:28 pm
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0
Who controls South Carolina

Who controls South Carolina government?

scredsfan
2
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scredsfan 09/03/10 - 06:28 pm
0
0
The Republic Party!

The Republic Party!

dwb619
93683
Points
dwb619 09/03/10 - 07:13 pm
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I hate taxes, I hate the

I hate taxes, I hate the price of gasoline, I hate buying gas in North Carolina, because their gas tax is about 20 cents more than South Carolina. But, look at the difference, if not just the cleanliness of their highways compared to ours.

Taylor B
5
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Taylor B 09/04/10 - 09:40 am
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Gas tax income is falling

Gas tax income is falling because the Feds are requiring cars to be more fuel efficient. That is also why cars are getting more expensive and have more issues.

Systems such as variable valve timing, waste spark ignitions, lighter, less durable materials (aluminum vs. Cast iron, steel), higher compression ratios for reduction of oxides, multiple O2 sensors are all in place to meet these standards. They are expensive and complicated, and a good explanation to car and service costs. All for the mighty MPG.

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