THE TAX Foundation’s latest rankings of state taxes are out, and we’re No. 50. As in, no state collects less in taxes per resident than South Carolina does.
If that surprises you, then you’ve come to the right place. Much of what we think we know about taxes in our state is simply wrong. And while people are entitled to whatever opinion they want about whether taxes are too high or too low or just right, those opinions ought to be based on facts.
No one should be surprised at this. I recall a debate in the Senate from some years ago when a half-dozen men tied up the Senate calendar one afternoon arguing over this same simple point. One whipped out a little booklet produced by some manufacturers lobby telling us that South Carolina was the highest-taxed people in the region. Another brandished some chart printed from the internet showing we were in the top five highest-taxed states in the nation. And a third wanted to refer only to an apples-to-apples comparison published by some governors' association arm showing that we were somewhere in the middle.
Of course, NO one wanted to listen to that last guy.
Of course, No. 50 isn’t the whole story. Anyone who tries to tell you that a single number sums up tax rankings is misleading you. This particular ranking, for instance, doesn’t include taxes collected by local government, which makes it not quite but nearly meaningless, since the division between state and local duties varies so much from state to state.
Our tax rate — which is the percentage of our total income that we pay in taxes — ranks 43rd. That means seven states have a lower tax rate than we do. (Our income, by the way, is $33,954 per capita, which ranks 46th nationally. Not something to celebrate no matter what you think about taxes.)
Per capita is $33,954, yet when someone suggests raising the highest tax rate for the wealthy, these folk earning $33,954 squall and cry, no, no, no, we can't raise the tax rate on the wealthy, I don't want to pay any more in taxes.
Scoppe's column includes a great deal more context, but here is a digest of figures to consider quickly:
50th. State tax collections per capita, at $1,577. The U.S. average is $2,339.
49th. Combined state and local tax burden per capita, at $2,742. Only Mississippians paid less, at $2,678 per capita. The U.S. average is $4,160.
43rd. Combined state and local tax burden as a percentage of state income, at 8.1 percent. The U.S. average is 9.8 percent.
35th. State tax revenue per capita, at $4,665. This figure and the next one count not only taxes but money from fees, licenses and federal funds.
36th. Combined state and local revenue per capita, at $7,006.
38th. Individual income tax collections, at $519 per capita.
44th. Corporate income tax collections, at $48 per capita. This says more about how little corporate income we have than about how much we tax corporations. Nonetheless, we score a similar 41st on a more complicated “corporate tax index” that is part of the foundation’s business tax climate index.
16th. Combined state and local sales tax, at an average of 7.25 percent. (The 6 percent state-only rate ranks 15th.)
39th. Combined state and local sales tax collections per capita, at $711. The fact that our sales tax rate ranks so much higher than our sales tax collections reflects our overabundance of sales tax loopholes, our reluctance to tax services and our poverty.
47th. State gasoline tax, at 16.8 cents per gallon.
41st. State cigarette tax, at 57 cents per pack.
25th. State spirits excise tax, at $4.97 per gallon.
11th. State table wine excise tax, at $1.08 per gallon.
5th. State beer excise tax, at 77 cents per gallon.
24th. State and local cellphone taxes, at 9.52 percent.
45th. Property taxes on owner-occupied housing as a percentage of median home value, at 0.5 percent. The U.S. average is more than double that: 1.04 percent.
36th. State and local property tax collections per capita, at $963. The U.S. average is $1,352.
And our Tax Freedom Day, on April 3 last year, was earlier than it was in 39 states.
Seems clear to me that people living in South Carolina pay less in taxes as a percentage of their income that people living in any other state in the nation. Funny; that's not what our lawmakers say in their stump speeches. But Scoppe addresses that, too:
What that means — like much of the information in this report — is that when people complain that taxes are too high in South Carolina, they’re not using any objective standard. Either they’re reflecting the fact that they are among those being hurt by our Swiss-cheese tax code or else they’re just saying they don’t want to pay taxes.
Scoppe's point reminds me of a little bit of Governor Jimmy Byrnes's address to educators sixty years ago last month. He said:
Naturally there is opposition to the Sales Tax. There is opposition to every tax, but I have failed to find any man who is really in favor of improving our educational facilities who will suggest a substitute tax plan.
I can understand the position of the man who thinks it is a waste of money to educate the children of people he calls "common people." He is willing that we should continue to have more illiteracy than any state in the Union. I disagree with him but I understand him.
I cannot understand the position of the man who says he is in favor of increasing teachers' salaries, improving the transportation system, constructing new school buildings, and yet opposes the sales tax and offers no substitute. He wants to help the children -- provided it does not cost him anything.
That cannot be done. It will cost money. But the education of our children is the primary duty of our State just as National Defense is the primary duty of the Federal Government.
Seems that we in South Carolina didn't want to pay taxes sixty years ago to support our public services, and we don't want to pay any taxes today to support our public services.