July 15, 2024

The Nerve Archive

Where Government Gets Exposed

Lawmaker Packs Several Distortions into One Facebook Post


‘There is no bill today that raise taxes.’ Really?

Contrary to what state politicians assert, we at The South Carolina Policy Council and The Nerve don’t twist their words or look for ways to play “gotcha.” Why would we, when their own words and actions do the job for us? But really – we don’t believe it’s our job to discredit politicians. It’s only our job to set the record straight on the facts, and when elected officials publicly misrepresent them, we do our best to play “truth squad.”

Toward that end, here is a post by Senator Paul Campbell, who takes issue with our research at SCPC (seems pretty clear he’s referring to our work showing the gas tax/income tax swap is just a plain old tax hike) and touts the research promoting the tax hike from various transportation special interests.

His side, my side. What do you think?

Senator Campbell says “let’s fix our roads and give South Carolinians a tax cut at the same time.” Great idea! But there’s no plan to do either. In the end, any of these plans will raise your taxes (by as much as 12 cents per gallon, with an automatic increase as much as 2 cents per year) and will not cut them by much if at all. They can’t guarantee tax cuts next year, much less in four or ten years. Even if they do kick in, the cuts are small – from 2 percent over ten years to .02 percent and some narrow targeted cuts aimed at a few taxpayers.

Tax swaps are useless – and ultimately bad – for citizens, but they benefit politicians who want to mask a tax hike.  Why else propose it when there’s no increase in revenue and no tax cuts for citizens overall?

Even if we wanted “revenue neutrality” (which politicians assume you care about more than your own revenue enhancement), these plans don’t get there because the numbers are flawed. For example, Governor Haley assumes income levels will grow by 4.3 percent every year for ten years. That’s never happened. From 2004-2014 income levels averaged less than 1 percent. Other plans work the same way – which means they don’t work at all as they’re promised to.

No one knows what the economy will look like next year, how much each person drives and what their income levels will look like. And they have no idea how many “out of state” motorists fill up in SC.

Senator Campbell calls on us to “let the 35 percent of out-of-state motorists who use our roads pay to fix our roads.” Why? It’s not as if we don’t all have to pay it. Perhaps if the number were accurate, he and his colleagues could argue that if it weren’t for those drivers, we’d have to pay more. But the number isn’t accurate because it can’t be, not with any specificity. That’s fine for analyzing trends, but not for promising tax relief.

That figure came from an old study by transportation lobbyists. They didn’t cite it or back it up anywhere. Recently, Senator Leatherman called on government economists to come up with rationale for it. We were treated to a complicated argument and a convoluted formula that assumed a number of miles driven by South Carolinians – another thing they can’t know for sure. At best, their number was a guess.

We aren’t guessing when we say our roads haven’t been fixed or maintained, and we know that the same people who have failed to do so for decades still run the system. Senator Campbell doesn’t suggest how the system will be more accountable and transparent. If it’s not, nothing changes. Period.

Every proposal raised so far to “swap” a gas tax hike for an income tax cut would result in a net tax increase for someone and eventually probably for everyone.  The proposals don’t offer the substantive change to the transportation system that would have to be made for anything to change in the way we fund roads and pick projects. If the same people are spending the money and choosing projects the same way they do now, the only difference would be that they’d have more money.

Ashley Landess is president of the South Carolina Policy Council, The Nerve‘s parent organization

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