The Taxation Realignment Commission bill, or S. 12, was amended in the Senate Finance Committee today. This is a major item on the Finance Committee agenda this year. There are some things I like about the bill, and some things I don’t. As soon as it’s available, I’ll post the full version of the amended bill to show ya’ll what we’re talking about. The main idea is in the title: TO ESTABLISH THE SOUTH CAROLINA TAXATION REALIGNMENT COMMISSION, TO PROVIDE FOR THE COMMISSION’S MEMBERSHIP, POWERS, DUTIES, AND RESPONSIBILITIES, TO PROVIDE THAT THE COMMISSION MUST CONDUCT A COMPREHENSIVE STUDY OF THE STATE’S TAX SYSTEM AND SUBMIT A REPORT OF ITS RECOMMENDED CHANGES TO FURTHER THE GOAL OF MAINTAINING AND ENHANCING THE STATE AS AN OPTIMUM COMPETITOR IN THE EFFORT TO ATTRACT BUSINESSES AND INDIVIDUALS TO LOCATE, LIVE, WORK, AND INVEST IN THE STATE, AND TO PROVIDE FOR PROCEDURES GOVERNING THE CONSIDERATION OF LEGISLATION RESULTING FROM THE COMMISSION’S RECOMMENDATIONS.
the trac bill
Sounds great! Who would be opposed to reforming our taxing structure? Certainly not a reformer like Kevin Bryant!
…hold on, the devil’s in the details. The bill did not get out of the committee today. I’m glad, because I could not support such a major proposal without further study.
what’s to like:
-TRAC will examine all of the taxes, exemptions, on every SC tax including sales taxes, income taxes, property taxes, fees, etc.
-Members will not be legislators. This commission will be made up of citizens appointed by the legislature and the executive branch.
-The goal is to make our taxing system more fair. The commission will look at all the sales tax exemptions.
-the commission expires after 5 years without being renewed by the Legislature.
-the 70 plus sales tax exemptions will be looked at to see if there is justification for them.
-commission members will disclose all sources of income just like us elected officials do. Strangely, this idea was mine and was adopted without opposition. (a first)
what’s to not like:
-the legislature will only be able to vote up or down. the bill requires a 60% vote for any amendments.
-there is no requirement for the commission’s findings to be revenue neutral. If this bill forms a commission that recommends a tax increase of any kind, the recommendation will be DOA from my perspective.
-there is no review of any Federal taxes. Even though the General Assembly can’t change the Federal tax burden, I would like to see the commission takes the federal burden into consideration when it makes recommendations to the Legislature.
-we will get two apples to bite at different times. the 1st step will be the sales tax exemptions, then a look at stage 2 (all the other tax changes). I want to see both of these reports at once. For example, step 1 removes the sales tax exemption for the twine (this is true) used to wrap a package sold in a store. I want to know if the twine guy gets a break in step 2, before I vote on step 1.
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