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A key component for maintaining a business-friendly climate in South Carolina is the recognition that all citizens – individual and corporate – should pay a fair and equitable share of government costs. To unfairly burden one segment, such as the business community, with a non-competitive tax structure is to stifle future growth.
In the same way that governments need stability and predictability in their revenues, citizens – both individual and corporate – need stability and predictability in their tax liability. In response to consumer pressures, lawmakers over the years have instituted a series of short-term tax reductions that managed to add recurring new services using non-recurring funds. While popular for tax relief in the moment, such measures become unfunded liabilities in times of economic downturn. Only a balanced tax system supported by stable revenue sources with each class of taxpayer paying a fair share, provides needed consistency.
As property values increase and property taxes grow faster than income, businesses and homeowners alike are feeling the burden. Inequitable tax policies in South Carolina are prompting businesses to locate or relocate in states with lower taxes. That substantially affects jobs, wealth creation, and overall economic growth.
Government revenue comes from four sources: taxes on wealth (property), taxes on income, taxes on consumption (sales) and fees. Fees currently are the fastest-growing of these sources. Future revenues are generated two ways, through increased taxes, which is a prescription for failure, or through an increased tax base. Clearly the latter is the only choice for an enduring healthy economy.
Businesses pay an inordinate amount of property tax. Research shows that the state’s overall tax burden per taxpayer compares favorably with other states and is 5 percent to 8 percent below the national average as a percentage of personal income. With regard to property tax alone, South Carolina is right in the middle, nationwide, with the one exception being in manufacturing, which pays much higher property tax rates. And South Carolina currently has the highest tax on industrial property and the eighth highest tax on commercial property in the nation.
The Board of Directors of the Spartanburg Area Chamber of Commerce believes that it is imperative that South Carolina remain globally competitive. Without comprehensive reform of the state’s tax system and structure, we will fall behind, losing jobs and growth.
The business community pays the lion’s share of all taxes in the state. Any reforms to the tax system that are instituted must be fair and equitable to all taxpayers – including businesses. If we are to achieve our economic mission to increase the wealth of our citizens and improve their quality of life, we must ensure that businesses, the creators of our state’s jobs, profit and grow. We must initiate movement toward “fair” comprehensive tax reform across the board.
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