Transaction Tax is a Viable Alternative

Contributed by Rusty DePass

Managerial experts tell us the height of stupidity is doing the same thing over and over expecting a different result.  Every day commentators and politicians ring their hands over how to get enough money to run the government but no one seems able to come up with a better idea than adding more and more taxes on top of each other.  Enough of this insanity!

I don’t want more sales taxes and I don’t want more property taxes and I don’t want residential property treated differently from other property.  My (probably former) legislative friends and Gov. Beasley may remember I told them giving relief only to residential property owners was the wrong approach.

I hear people complain that their taxes are higher now than when the “relief” was granted.  No kidding!  That’s because government’s appetite is insatiable.  You poor saps who thought your taxes were going down if you voted to increase your sales tax an extra penny on the dollar just got “had.” [Don’t blame me!—I knew what was going to happen and voted against it.]

What we need in South Carolina is a transaction tax.  If we could get everybody in the tax paying game, we could raise enough money to give us all the government we   could stand.  But the trick is there must be NO exceptions and we have to do away with ALL other taxes!

This is the only imaginative alternative and the only one available to us which does not give the government an unlimited number of hands with which to pick your pockets.

A transaction tax in the 1% to 1.5% range would decrease dramatically the taxes paid by the poor and place the tax burden where it should be: on those who spend.

If you buy $100 worth of groceries, add $1 to it.  Pay $100,000 for a house and add $1,000 to it.  Buy a $20,000 car and pay an additional $200, less than you pay now.  If you can afford an $80,000 car, another $800 won’t hurt you.

Right now the fellow who needs basic transportation to get to work pays 5% sales tax on a $6,000 car.  However, the “Mercedes and BMW Owners’ Relief Act” provides that the purchaser of a $60,000 car pays ½ of 1% sales tax.  Is this a great state or what?

If an industry pays $1 million for a piece of property to build a plant, it hardly seems much of an imposition to add $10,000 to the price.  If your lawyer charges you $500 to write your will, it’s $505.  If your dry-cleaning is $20, add 20 cents.

The transaction tax or fee would be paid at every level of manufacturing.  Right now no one pays.  In fact, if you have never seen the list of exemptions to the sales tax, get it and read it.  You will be astounded.

But the trade-off has to include the elimination of ALL other taxes.  If you leave other taxes on the table, your friendly neighborhood city and county councils, most of which are out of control anyway, will simply increase whichever one produces the least resistance (right now the sales tax).

Now I don’t expect anyone at the newspaper to be happy about this because they would have to start paying taxes (newspapers are now exempt).  We can’t even get The State to come into the city and pay the high property taxes they want all the rest of us to pay.

The reason everyone wants to give property tax relief to people who own residences is because there are so many of them, but the governing class will just raise the tax back up after the relief is given and pile additional taxes on non-residential property to the point that no one can afford to own or invest in our communities.

The answer, ladies and gentlemen of South Carolina, is not to beg a little relief from these selfish, arrogant officeholders who run for office on a platform of reducing taxes and when elected just can’t seem to find enough of our money with which to do good for us.  The answer is to force them to enact a system of taxation which is fair and does not involve a permanent government mortgage on everything you own.

No naysayers!  Until the numbers are run and a fair assessment is done, this is as viable an option as any.  Besides, we know the other ways don’t work; they never have.

Let South Carolina lead!

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3 Comments to “Transaction Tax is a Viable Alternative”

  1. This makes far too much sense. They will never go for it.

  2. I like the plan except for the part about “transaction tax or fee would be paid at every level of manufacturing”. This is the VAT tax that the socialists in Europe just love and Chairman Zero would love to implement, here. The other problems are that (1) you have to get ALL other taxes repealed and (2) you have to keep politicians from raising the rate over time. I would love to see the tax structure in this state completely overhauled to make it more Fair and equitable. Eliminate the income and property taxes (which I consider immoral) and replace them with a low sales tax like you mention at the point of sale.

    Good article.

  3. Paul–You make a fine point but I would offer this in rebuttal. If you don’t make EVERYONE pay, the change won’t work. NO EXCEPTIONS but ALL OTHER TAXES GO AWAY. The VAT tax enacted by Socialist governments in Europe is not wrong because it is a VAT. It is wrong because it is confiscatory. If BO imposes a VAT in this country it will be 23+% and it will NOT eliminate all other taxes. If you had only one tax source and the legislators tried to raise it, there would be howls of protest and a lot of retiring and defeated legislators. The reason they keep raising our taxes is because it is easy and it follows the path of least resistance. Give it a chance. I have an idea we would be the envy of the nation.

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