Commonviews 2002: Not All Property Tax Plans Are the Same
May 1, 2002
(Commonviews 2002 is a series of articles examining the most important issues in South Carolina's 2002 statewide GOP primary races. Click here to find out more about the purpose of Commonviews 2002 and how to submit your own suggestions for future topics of discussion.)
They have been called immoral, unfair and unAmerican. People do not like them because they take away one of the basic freedoms we have in this country, which is home ownership, because people have to ďrentĒ the property they own from the government every year. They stifle new home and cars sales and prevent businesses from expanding. They go up even in a bad economy and if they are not paid regardless of the reason, then the government can and will confiscate your property from you no questions asked!
What are they? Of course, I am talking about property taxes!
The general consensus across South Carolina is that something must be done about the skyrocketing property tax rates that keep going up and up year after year forever! In fact, the car tax in South Carolina is the 2nd highest in the nation. People all over the state have been wondering when the madness will ever end.
In 1995, the Property Tax Relief Amendment was enacted by the South Carolina General Assembly to supposedly help control the soaring property taxes across the state. Unfortunately, less than a decade later, property tax rates have risen back up to a point where they are destroying peopleís lives again! This is the danger with property taxes. The temptation for local governments to raise them back up again after they have been lowered is immense.
The subject of what to do with property taxes has risen to the top of the heap as the most pressing issue in the 2002 Republican Governorís race. Three of the seven GOP gubernatorial candidates have offered property tax reform plans they they think will resolve the problems associated with this very unpopular tax in our state.
The following is a brief synopsis of the property tax reform plans suggested by Secretary of State Jim Miles, Lt. Governor Bob Peeler and Attorney General Charlie Condon:
He calls for a Constitutional Amendment to permanently eliminate property taxes on homes, real estate and personal property owned by individuals. The property tax cuts he proposes will be phased in over a four-year period. During the first year of his plan, he would eliminate property taxes for all senior citizens. Then, over the next 3 years, he would phase in the complete elimination of all property taxes on homes, real estate and personal property owned by individuals in South Carolina. He will pay for the cuts with future government growth and cutting unnecessary government services.
His Property Tax Freedom Plan calls for a Constitutional Amendment to get rid of property taxes on owner-occupied homes and cars over a seven-year period. He will pay for the cuts with future government growth without any new taxes or new revenue alternatives. His plan also calls for lowering business property tax rates from 10.5% to 8%.
His plan calls for a Constitutional Amendment to end all property taxes in South Carolina, including those on cars, homes, boats, airplanes, RVs and businesses. The current $2.3 billion collected in total property tax revenue will be completely replaced by closing unnecessary business sales tax exemptions, reducing administrative costs of local governments to 25%, getting rid of the property tax collection system and offering several options for the remaining property tax replacement revenue, including the option of a gradual elimination over a period of time or a nominal sales tax and/or a state income tax increase.
All of these Republican candidates for Governor should be commended for putting forth plans to do something about property taxes in South Carolina. They all agree that a Constitutional Amendment is needed to make their respective proposals work. They also agree that property taxes need to be removed from peopleís lives.
However, although all three of these candidates have offered good ideas for reforming the property tax system in South Carolina, not all property tax plans are the same.
First, Jim Miles wants to eliminate property taxes on homes, real estate and personal property owned by individuals. This covers the elimination of property taxes on vehicles and homes over a 4-year period, but does not include eliminating the property taxes on businesses.
- How does he plan to pay for the immediate elimination of property taxes for senior citizens?
- What happens to his plan if the growth revenues fall short of projections?
- What about the shift of burden to business owners who will still have to pay 10.5% in property taxes, the highest industrial property tax rate in the Southeast?
These are just a few of the questions that are too important to ignore when seriously considering this plan.
FACT #1: Jim Milesí plan DOES NOT eliminate ALL property taxes in South Carolina!
Second, Bob Peeler wants to eliminate property taxes on owner-occupied homes and cars. His plan covers the elimination of these property taxes over a seven-year period. But, his plan only calls for the reduction of the property tax rate on businesses to drop from 10.5% to 8%. While this slight reduction may help businesses in the short term, in a few years, the burden of taxation will be shifted solely to the business owners in South Carolina.
- What is going to prevent business property tax rates from soaring way above 10.5% once all the other property taxes have been eliminated?
- If property taxes are unfair to homeowners and car owners, then why arenít they also unfair to business owners?
- What incentive will new businesses have for coming to South Carolina if property taxes on businesses are allowed to remain in place?
- If new business ventures are given a fee-in-lieu-of agreement to relocate to South Carolina, then what will be done to prevent their tax burden from being shifted to the small business owners who comprise nearly 90% of the economy in South Carolina?
- If Bob Peeler has not been able to abolish car taxes in the Senate, where he has presided for the last eight years, then why should we wait another seven years to see if he can do it this time?
Again, these questions should linger in the minds of everyone who is comparing these property tax reform plans carefully.
FACT #2: Bob Peelerís plan DOES NOT eliminate ALL property taxes in South Carolina!
Finally, this leaves us with the plan offered by Charlie Condon. He is the only candidate who wants to end EVERY single property tax currently being collected in South Carolina. His plan includes cars, homes, boats, airplanes, RVs, businesses and every other piece of property that is taxed in South Carolina. His plan allows for the exemption of the sales tax on food, medicine, education and healthcare. He plans on replacing the property tax revenue by closing business sales tax loopholes, cutting local government administrative costs, eliminating the property tax collection system (Did you know that it costs in excess of $100 million just to collect property taxes in South Carolina every year?!) and offering options for the remaining replacement revenue.
At the town hall meetings he has been conducting across the state this year, he has offered three options for people to choose from to make up the final amount of replacement revenue:
Cut property taxes by 50% now and dedicate future growth to the complete elimination of property taxes without any increases in the sales or state income tax. Property taxes would be slowly phased out over a 4-10 year period.
End property taxes NOW and raise the sales tax 1-2 cents.
End property taxes NOW and raise the state income tax 1-2%; or a combination sales tax/state income tax increase of 1-2%.
Overwhelmingly, the people who have been at these town hall meetings have chosen Option 2 as their preferred method for completing getting rid of property taxes in South Carolina. A few people enjoy the deductability advantages of Option 3, but not many. None of the people have been in favor of Option 1, which is more akin to the plans offered by Mr. Miles and Mr. Peeler. Plus, they rely too much on future governments to control spending. History shows us that is nearly impossible!
FACT #3: Unlike the others who are claiming their plans end property taxes, Charlie Condonís plan really DOES eliminate ALL property taxes in South Carolina!
The differences between these property tax reform plans are stark. This is what people need to understand before they go to the polls to vote in the GOP primary on June 11th and in the runoff election on June 25th. Although the press may be lumping all of these property tax elimination plans into the same category, you can now see that they are NOT the same.
What do YOU think?
If you are a supporter of any of these plans and would like to defend your candidateís position, then what am I missing about the property tax reform plans by Jim Miles and Bob Peeler?
Are there any problems that you can see with Charlie Condonís plan to end all property taxes in South Carolina?
Click on the "Comment On This Article" button below and discuss the property tax reform plans suggested and tell us what YOU think. Please try to limit your comments to what specifics you think make your candidateís plan the best vs. the others. I am anxious to hear your thoughts about this vital issue!
Previous Articles In the Commonviews 2002 Series:
Candidate Debates Show Individuality
A Closer Analysis of GOP Gubernatorial Poll
Campaign Sign Contraband & Shenanigans
Ozmint-A Prosecutor Or Politician?
McMullen Missing Experience?
Commonviews 2002 Series Coming to Commonvoice.com