An E-mail From Gov. Sanford
May 15, 2003
Guess what? Did you know that Gov. Mark Sanford reads CommonVoice?!
It’s true! I was pleasantly surprised to find that I had received a personal e-mail from him late last week in response to my March 17, 2003 article about what I consider his misguided cigarette tax increase proposal in exchange for state income tax relief in a few years.
The following is that letter along with my commentary in between:
May 8, 2003
TO: Mr. Jimmy Moore
This was pretty cool! Rather than addressing me in a formal manner as most politicians would do (such as, Dear Mr. Moore, Thank you for contacting the blah, blah, blah...), Gov. Sanford (or presumably a member of his staff writing this e-mail for him) chose to address me by my first name. Okay, Gov. Sanford, I’m listening...
Thank you for getting in touch with me about the proposed increase in the cigarette tax. I appreciate your taking the time to share your thoughts on this issue, and I agree with many of the concerns you raised.
You're welcome, Gov. Sanford! I am also happy to engage in conversation about the issues of the day here at CommonVoice. In fact, this is a great place for you and other government leaders to hang out and visit often to check the pulse of your electorate on the public policy issues you are debating in Columbia. We have some rather lively conversations about the proposed laws you guys want to implement. We appreciate your willingness to stop by and hope to see you again often.
Because there is a lot of misinformation out there, let me give you a little bit of detail on our proposal and how I think it addresses some of your concerns.
I’m anxious to hear your clarification about the alleged “misinformation” being spread about your idea to raise the cigarette tax in exchange for a future decrease in the state income tax. I’m all ears...
First, as a conservative, I will not propose anything that doesn't lower the net tax load in South Carolina.
Okay, that sounds good, but what I want to know is what is your proposal going to do for me in the hear and now? And by “net tax load,” I presume you are saying that in the long run, this turns out to be a tax cut. Let me see if I have this straight, Gov. Sanford. In the meantime, while we are waiting for the “net tax load” to be reduced, smokers will have to endure a higher tax burden to help pay for the income tax rate reductions for the rest of us. That sure sounds like you are targeting a specific group of taxpayers to pay for tax cuts for other people who don’t share their same vice! As a “conservative,” Gov. Sanford, it would seem to me that you would want to help ALL South Carolinians during this time of economic slowdown and layoffs by giving money back to taxpayers rather than making them wait a few years before they’ll see it. Nevertheless, I’m still listening...
This proposal is true to this belief because while the cigarette tax goes up - the income tax goes down by a significantly greater amount.
Again, how soon does the income tax come “down by a significantly greater amount,” Gov. Sanford? Why do smokers have to bear the burden of taxation for the sake of this state income tax reduction? Isn’t there another way to lower the state income tax without raising taxes at all? Surely a conservative like you ought to be able to find a way to make it happen!
Our plan is, in fact, a substantial tax cut to every South Carolinian - smoker and non-smoker alike; $117 million over 3 years, $219 million over 4 years and over the 15 years it takes to go from a 7% rate to a 5% rate - the result is $7.2 billion in tax cuts. For a smoking family making $20,000, the net tax cut is $206.55; for a smoking family making $40,000 the net tax cut is $606.55. Just as importantly, our plan slows the rate of growth of government over the next 15 years. Because it is a substantial tax cut, even Marty Feldstein, Ronald Reagan's head of economic advisors and the architect of some of the largest federal tax cuts in American history, was kind enough to send a letter in support of our concept.
Yadda yadda yadda. You can throw all those numbers and letters of recommendation out there all day long, Gov. Sanford. But as long as you are proposing a tax increase on a targeted group of taxpayers, your plan just doesn’t make a whole lot of sense to this conservative! Cutting taxes is one thing. But raising taxes immediately while simultaneously setting the wheels in motion to gradually lower taxes is just plain strange. Why raise taxes at all if the eventual goal is to lower taxes overall? And why target just smokers? How about levying a tax on Oreo cookies (the new evil target), Big Macs or even your beloved gasoline idea? You know, now that the price of gas has come way down from the prices we saw just a few months ago, I’m surprised you haven’t considered hiking the gas tax by a nickel or dime! That sure would bring in a lot of revenue to pay for an income tax reduction and would be a more equitable share of the tax burden than a cigarette tax! Have you abandoned this idea completely, Gov. Sanford?
We have a real jobs and economic development problem in our state and this income tax change would help cure it.
Uh, NEWSFLASH! There is a jobs and economic development problem in EVERY STATE right now, Gov. Sanford. President Bush’s tax cuts will help with this problem immensely and you should be out there as a chief supporter of President Bush on this issue instead of proposing even more tax increases. That’s what the Democrats are trying to pull in the U.S. House right now. They want to raise taxes on some to pay for lowering taxes for others. It’s wrong! While lowering the state income tax will help as well, it should not be done on the backs of smokers.
Our income tax rate lies in the top ten in the country and is effectively the highest in the Southeast. In fact, in contrast to our 7% income tax rate, the national average is 4.65% and the Southeastern average is 4.25%. This proposal would slowly move us from a 7% rate to a 5% rate and is the only tax proposal at the state level that would universally affect the competitiveness of small businesses - which are the backbone of job creation in our state. Small businesses make up 97% of all businesses in our state and half of them have four employees or fewer. This change is important not only because of the way that it impacts small enterprise but also because of the way it would make our state more competitive in attracting and retaining intellectual capital.
Do you really want to help small business owners, Gov. Sanford? How about rolling back the high property tax rates they have to pay year after year just to keep the government from seizing their business? This one tax alone literally saps a large chunk of the profits that are brought in. This tax by itself is more unfair than any other to the small business owner because he is forced to downsize personnel and/or increase prices just to pay it. The government should not stifle businesses in the manner that has resulted from outrageous business property tax rates. They should be lowered to a reasonable enough rate so business owners can compete, regardless of the health of the economy. This would create jobs which would, in turn, grow the economy (much in the same way the Bush tax cuts will do once they are finally enacted into law!).
This proposal also creates a secondary win in our business climate as it relates to health care where the old adage has always been ‘pay me now - or pay me later - but you're going to pay me.’ We are not a third world country and do not let people die in the streets, so if someone isn't covered with private insurance or the social safety net, they can still walk into the emergency room to receive treatment - albeit at a much higher cost. This cost is then shifted over to the privately insured which is why small business health insurance premiums have been jumping upward at ten to twelve percent a year. Fully funding Medicaid would substantially rein in this inflation.
Huh? What the heck does this have to do with raising the cigarette tax, Gov. Sanford? While I understand what you are saying intellectually, I do not agree with this method for funding Medicaid. Furthermore, on a personal note, as someone who has not had medical insurance for nearly three years (and has paid nearly $2000 out of pocket for medical expenses for my wife in just the past month), I can tell you that your cigarette tax increase will not do one single thing to help me pay my medical bills. Has this devastated my personal economy? Absolutely. Am I concerned about how I will pay my mortgage payment, electric bill, student loans and the unexpected circumstances in life that will arise in the next few weeks and months? Yep. Would your proposal help me one bit if it was a law already? Not at all. How’s the weather in that vacuum you live in, Gov. Sanford?
This plan isn't perfect,
YOU CAN SAY THAT AGAIN!!!...(on second thought)...
but as a conservative it was an opportunity to lock in a substantial lowering of income tax rates and help our economy in a year when there is frankly little appetite to cut taxes in Columbia. In fact, it is a rare public policy win in that it combines a tax cut while at the same time providing not less but more money in Columbia to address a Medicaid system that is under funded.
I hope you do a better job of trying to persuade citizens and lawmakers to embrace your ideas in the future, Gov. Sanford. While you consider your proposal a “rare public policy win,” I think you and the Republican-controlled General Assembly can come up with much better solutions than a tax increase to fund Medicaid and lower the state income tax. Sen. David Thomas’ proposed sales tax increase was shot down in a blaze of glory and so will your cigarette tax. It’s time to go back to the drawing board and come up with another (even more conservative) proposal!
Not optimistic math but, rather, the $400,000,000 in matching funds we are currently leaving in Washington make this possible. For a state as needy of resources as ours, I think availing ourselves of matching funds from Washington rather than donating these funds to other states makes sense. It is also conservative to provide a long-term funding source for a long-term expenditure. For too long, our state has borrowed from Peter to pay Paul and, sooner or later, this catches up with you, as it has in this budget year.
While I don’t blame you, Gov. Sanford, for the budget crunch we currently face (your predecessor and his willing accomplices on the Budget & Control Board bear most of the criticism), I expect you to make wise choices as Governor. While securing the matching federal funds is indeed an wise decision, I urge you to reconsider your options about where the additional money will come from.
I think the Senate Finance Committee recognized these wins when they passed our proposal unanimously, but we still have a long way to go. I would appreciate your consideration of this idea and, even if you still disagree, I appreciate your taking the time to write to give me your perspective - it helps me in evaluating and examining my own. Take care.
Thank you for taking the time to write me a personal e-mail regarding my concerns over your cigarette tax proposal, Gov. Sanford. Whether you wrote the e-mail personally and signed it “Mark” or if Will Folks wrote it for you, I think it is great to see you personally respond to the criticism you receive. I sincerely encourage you and your staff to visit CommonVoice often to find out what people are saying about your policy proposals.
I look forward to hearing many great ideas from a man who called himself “a leader, not a politician” during the campaign last year. It would be a shame to see Republicans waste this opportunity to make substantive changes in public policy on the state level. You MUST work in harmony with House Speaker David Wilkins and the state Senate to enact lasting legislation that so many conservatives in South Carolina have been waiting for. Now, get to it!