Taxation, with Representation

Here in South Carolina the state tax on a gallon of gas is not quite twenty-one cents. Pull in to refuel your 2006 Chevy Silverado or your 2016 BMW X5 and the state tax per gallon is the same. We drivers are using the same roads, so fair and square all the way around most would think.

By the way, this tax is a regressive tax, which means the tax is not set upon the economic ability to pay. But I am headed elsewhere topic-wise in this post.

Imagine for a moment that our state legislature decided by law that your primary vehicle—you only get one—would pay a tax of 16 cents per gallon and other vehicles, and commercial and leased vehicles, would pay 24 cents on the same gallon.

I’m thinking a lot of folks would cry foul, not fair, or they can’t do that. Well of course they can.

My property tax on my home—my principal residence—here in Spartanburg County is as mandated by state law 4%. For simplicity’s sake, I’m setting aside Fair Market Value and millage rates.

My property tax on a rental house I own in Dorchester County is set at 6%. Glance back at my state gasoline tax example. See, it can be done.

To keep the math simple, the tax on $100,000 owner-occupied house is $400, $600 when a rental. So, in effect, renters are subsidizing homeowners. (The landlord-owner isn’t covering the difference most likely.) Nice.

Well, if you are the homeowner across the street from a renter. Imagine both have 2 kids in the local public schools. The renter is kicking in 50% more than the homeowner. Nice.

So the tax rate turns on your willingness to be a homeowner or—here the kicker—your financial ability to be a homeowner. Nice.

Renters…. I’m thinking. College kids living off campus, folks waiting for a home to be built, the poor, people transferred into an unfamiliar location and cautious about buying until they get the lay of the land, the elderly who may not be able to maintain a property, twenty-somethings digging out from under college debts. Feel free to expand the list.

According to Federal Reserve Economic Data, as of 2017 home ownership in SC was 72.8%. Now I’m thinking—uh-oh—that not taking into account our homeless population in the state, just about everyone is under a roof, owned or rented. So more than one in four are taxed more heavily because they rent rather than own that roof they are under.

Of course, you know that whole needs thing. Food, water, shelter.

What do I want? That the rate be unified at 4 or 5 or 6%. And then the hassle of millage rates and Fair Market Value can begin.

Dang, there is that word again. Fair.

Own a home? Hug a renter.

Another by the way, once upon a time in our fair land, the right to vote was limited to white male property owners. The last state to abolish the property requirement for all nearly white males to be enfranchised? North Carolina, 1856.