News & Updates

The Post and Courier (Charleston, SC):
Op-Ed - South Carolinians bear the burden of excessive taxation

BYLINE: Rep. Chip Limehouse

All Americans are aware of April 15 - today's deadline for our tax returns to be filed with the Internal Revenue Service and the South Carolina Department of Revenue. While paying taxes may be our civic duty, I know of no one who is pleased by participating in this annual exercise. As a matter of fact, each year when my wife and I sign our returns, I am outraged by the amount of money our federal, state and local governments demand from us. Like many of you, I believe it is past time for the federal government to scrap the current tax code and start from scratch. Americans are screaming for tax relief and a fair tax system.

Most South Carolinians don't realize that in 1998, the average day for South Carolinians to reach Tax Freedom Day was May 9. Tax Freedom Day is the day when you finally have worked enough to pay all your taxes. The South Carolina Policy Council reported that on average, it took South Carolinians 128 days to pay off their total federal tax bill and 42 days just to pay off their state and local taxes. l was disappointed to learn the average number of days nationwide needed to pay off taxes in 1998 was 88 for federal and 41 for state and local taxes. Unbelievably, South Carolinians must work 40 days more than the national average to meet Tax Freedom Day. Twenty-nine states reach Tax Freedom Day before South Carolina.

I was further annoyed to read when federal taxes were excluded, South Carolina ranks 19th in the nation on state and local taxes and 21st on overall taxes. For the record, Connecticut ranked first in overall taxes; Alaska ranked last. Like many of you, I always thought of South Carolina as a fairly low-taxing state in comparison to the other 49 states, and was surprised to see we rank 21st on overall taxes. That is reason enough for all South Carolinians to demand immediate tax relief.

Unfortunately, one area where taxpayers are hit hardest is property taxes on cars and real estate. I have already introduced legislation capping property tax increases statewide. As a homeowner, I am concerned about our reassessment next year, and pledge to do everything within my power as a lawmaker to ensure that regions like the Lowcountry are not unfairly targeted by reassessment. The fight in the General Assembly will be tough because many of my colleagues represent areas where reassessment will not be a problem. However, rest assured, this is one issue on which the Charleston area legislative delegation is united.

Additionally, I believe it is time to address the issue of unfair car taxes. Owning a car is not a luxury, but a necessity - and no one should be taxed excessively to own a vehicle. Currently, South Carolinians pay the second-highest car taxes behind only Connecticut. As a lawmaker, I voted to eliminate car taxes in 1998, reduce car taxes in the 1999 state budget, and I expect the General Assembly will eventually eliminate this inequitable tax once and for all.

The Dec. 28 edition of The Post and Courier reported about the high number of Charleston residents sighted in cars registered in North Carolina. To quote the article, "A number of Charlestonians we know have homes in the North Carolina mountains. They tell us they register their cars there and save significant money - one told us he saved $ 1,000. That's enough to pay for all those trips back and forth and then some." Regrettably, some South Carolinians have chosen this illegal action rather than working to see the regressive car tax is eliminated. Illegally registering a car may save the taxpayer his hard-earned money, but it does nothing to change anything in South Carolina.

Sadly, there is nothing we do in our daily lives that is not affected by government taxes. We see taxes and fees on our telephone bills and cable TV bills. When we stay in a motel or eat in a restaurant, we pay state and local taxes. Seventy-two percent of what is paid for distilled spirits goes to taxes and 43 percent of a bottle of beer goes to taxes. Local government even imposes development impact fees on new residents to pay for services like transportation, fire, police, schools and cultural activities, even though existing taxpayers benefit from these same services. And since impact fees are one-time fees, all taxpayers eventually pick up the tab to pay for bloated governments.

Did you know on the typical phone bill, the consumer must pay a federal excise tax, state and local taxes, city excise taxes, a state gross receipts surcharge, a franchise charge, an FCC charge for interstate toll access, a Telecommunications Access System Act Surcharge, Emergency 911 charges and local maintenance fees?

But that's just for starters. Out of the remaining amount you pay for telephone calls, the phone company must pay federal income taxes, workmen's compensation taxes, federal and state payroll taxes, unemployment insurance taxes, state franchise taxes, local property taxes and any applicable local income taxes. Altogether, these taxes account for about 20 percent of the total phone bill. Added to the taxes paid directly by the consumer, this means about 50 percent of what you pay for your phone goes to the government in taxes rather than for phone calls. That's outrageous!

Yet there's even more - the government imposes about 30 taxes on a loaf of bread in the process of production from farm to the store. A recent Price Waterhouse study found these taxes accounted for 27.2 percent of a loaf of bread, not counting sales taxes paid directly by the customer. So out of the average price of a loaf of bread, $ 1.09 in 1995, about 30 cents goes for taxes, plus another 5 cents on average for sales taxes.

What about electricity? Because electricity is a necessity, it is fair game to advocates of big government. They love to impose taxes on it. Americans for Tax Reform reports, in addition to sales taxes, states impose gas import taxes or other surcharges on your bill. As a result, on average, 11.2 percent of what you pay for your electric power bill goes to state governments for these taxes alone. Nearly one-fourth of what you pay for your electric bill goes to the government rather than for the electricity. Overall, the government collects almost $ 50 billion per year nationally on taxes paid through your electric bills. Imagine what would be collected if Al Gore's Global Warming Treaty is ratified.

The American people are overtaxed and relief is needed. We are tired of being nickeled and dimed, and I personally resent the hidden taxes found in everyday products and services. Enough is enough! Therefore, I urge all of you to contact your lawmakers both in Columbia and Washington, as well as your local city and county officials and demand that taxes be cut and government reduced. Sure, the problem is Washington and Columbia, but the problem also is local. Studies show that in the 1990s growth in local governments has significantly outpaced growth in the state and federal governments.

Personally, I don't care where the growth is occurring. As a taxpayer, I just want relief. As a conservative legislator, I pledge to support all tax relief when it is fair and in the best interest of my constituents.

Limehouse represents Charleston County District 110.

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