THE GOOD FIGHT ‌ Another Lesson from History 

In South Carolina, tax cuts are for the rich

Historian Walter Edgar has pointed out that South Carolina was founded by a group of planters from Barbados who brought their oligarchic attitudes with them. Those attitudes are still alive and well among us.

The Barbadians created a top-down society, with the plantation as the basic unit of political power. Later the cotton mill replaced the plantation. Today the corporation is the center of power in this very conservative state. But whatever the age or the nature of the economy, the state's political power has always been from the top down, and democracy has never been more than window dressing.

That was never more obvious than with the General Assembly's recent tax-writing policy. First, let's take a look at the $81 million income-tax cut the white Republican majority in the House just voted to give to the wealthiest South Carolinians.

The tax cut is part of the $7.3 billion state budget. Democrats tried to block the income tax cut, saying that the money could be spent on so many other things, including education, better roads, Medicaid, or new school buses for our children. This was a particularly pointed argument in light of The Post and Courier's recent series of stories, detailing how the state's school bus fleet is the oldest, most dangerous, most polluting in the nation.

The House did vote to direct some money to that problem and to rotate out the state's decrepit school bus fleet over the next 15 years! But nothing could dissuade the Republicans who run the legislature from cutting the income tax.

"Republicans are about cutting taxes -- that's what we do," Rep. Dan Cooper (R-Piedmont) said.

But Rep. Vida Miller (D-Georgetown) said that she had never had a constituent ask her for income tax relief in her 10 years in Columbia. And why should she? South Carolina has one of the lowest income taxes in the nation.

An analysis by the State Revenue Department shows that the tax cut would mean a $35 savings for a family of four with an adjusted gross income of $45,000 a year; $130 savings for a family earning $100,000; and $1,638 for a family with income of $1 million.

Democrats argued, instead of income tax relief for the wealthy, why not cut property taxes or cut the sales tax on groceries, where it would be felt by those who need it most? But Republicans would have none of that.

With no groundswell of support for an income tax cut, with so many critical needs going unfunded in this backward, undeveloped state, why would Republican lawmakers insist on this tax cut so clearly engineered to benefit the rich?

There is only one explanation: They were listening to their DNA. They were following an ancient South Carolina imperative which dictates that government exists to serve power and wealth.

This same sad tradition is the basis of the funding crisis the Charleston County School District (CCSD) now faces.

Under the budget now being considered in the House, CCSD stands to lose more than $15 million in funding under the formula of the Education Finance Act. These cuts are being proposed because the Republican-led General Assembly is still trying to work out the details of the change in public education funding from a system based primarily on property taxes to a system based on the new sales tax law that was passed last year.

Under this complex EFA formula, Charleston County is one of five districts slated to receive a deficit in funding this year. The funding crisis is compounded by the fact that the state has added requirements for an additional $12 million in spending. Between reduced funding and additional spending mandates, Charleston County School District is looking at a deficit of between $25 million and $32 million for fiscal year 2008.

What is this EFA formula?

Last year, the General Assembly passed the Property Tax Revaluation Reform Act, dramatically changing funding for public education in South Carolina. Among other things, it increased the sales tax to offset a reduction in property tax, the traditional source of most education funding.

The General Assembly has determined that Charleston County has the highest property values in the state to support its schools, and therefore the least need for supplemental state funding from the state Homestead Exemption Fund. Fair enough. But last year's property tax relief -- aimed at relieving taxes for the wealthiest property owners in the state -- also capped the millage rate on the most expensive property in the county. Charleston County Schools are caught in a double-whammy: The high property tax base makes it ineligible for state supplemental funding, yet that same tax base in undermined by the millage cap on property tax.

School children lose and the wealthy win again. And history repeats itself, as it always does in South Carolina.


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