Everybody who lives in South Carolina pays sales taxes. Everybody, directly or indirectly, pays property taxes. But income taxes — that other sturdy leg of the state’s tax portfolio? Lots of people don’t pay income taxes.
Most of them don’t make enough money. Or they make enough to be able to figure a way around it through the dozens of exemptions and tax credits that are available.
According to the state Department of Revenue, some 884,516 individual income tax filers — some 43.1 percent of those who filed — paid absolutely no state income taxes in 2010. Another 39,230 filers paid $25 or less.
In lots of ways, it just doesn’t seem fair, especially since everyone benefits from services provided by state government. Seems like everybody ought to pay just a little bit so that they will have some “scratch” in the game.
So here’s a proposition that’s bound to cause some double-takes: What if the state added a new $25 per year fee for every income tax return that’s filed? Two caveats: If you pay more than $25 a year in income tax, you wouldn’t have to pay the fee. And if you pay between zero and $25, you would have to pay the difference until you reach $25.
Instituting such a filing fee would generate more than $22 million a year — more than enough to pay for the annual cost of SCETV or the state library system or a whole bunch of new school buses. But beyond the revenue, would a new fee be worth it?
The left-wingers who still remain in the state might squawk that requiring a fee from everybody would make the income tax less fair and penalize people who pay nothing. And they would be right. Requiring everybody to pay a little in income tax would shift the nature of income tax, which was originally started as a “progressive tax” (not a political term, but an economic one) to require those who earn more to pay more to balance the regressive nature of things like sales taxes, which take away a larger share of the poor’s disposable income.
And they would also be right in observing that the poor already pay a larger share of a lot of things in the state budget because of all of the fees associated with the criminal justice system, which the poor get involved with disproportionately.
But come on, shouldn’t everybody be able to find a way to pay just $2 a month for state-funded services that they receive?
Just as left-wingers might squawk a little about this notion, right-wingers might be tempted to grin and think things like, “It’s about time” or “Good idea. ‘They’ should be paying something.”
Frankly, this kind of thinking is short-sighted. It would continue to foment the seeds of division — “us” versus “them.” Democrats against Republicans, the poor versus the rich, black against white, and on and on.
Remember if everybody pays a little bit, it will be a little harder to ignore people who have been ignored by policymakers for far too long. It will be a little harder for right-wingers to play the polarizing politics of “us” and “them.”
So think longer-term about what this new fee could do. It could become easier to feel and observe that “we’re all in this together,” which might make it easier to work together on our multitude of problems, develop a statewide agenda and implement it.
The notion of having everybody pay an income tax filing fee might still have some kinks in it. But in the long run, it just might be a way to reduce the combative, partisan nature of politics at the Statehouse. When everybody has a little scratch in the game, we might work more like a team of South Carolinians toward common goals, not a discombobulated group of partisan hacks trying to score points with every policy volley.
Andy Brack is publisher of Statehouse Report. He can be reached at: brack@statehousereport.com.
(843) 766-WEST (9378)
publisher@westof.net
