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AIKEN - Many residents in this city near the Georgia border are opposed to
South Carolina lawmakers increasing the state sales tax to help reduce
property taxes, but they acknowledge an extra penny or two on the dollar
won't send them scurrying across the state line to shop.
"I wouldn't drive and waste the gas," said Jesse Good, a pharmacy technician
at Aiken Drug, a downtown staple. "Everybody would just have to suck it up."
There are a couple of plans to reduce property taxes pending in the General
Assembly. Lawmakers, at the urging of voters who saw property tax bills soar
last year, will try to agree on one of the most debated issues this
legislative session.
One plan, approved by the House, would raise the state sales tax 2 cents on
the dollar, cutting taxes on owner-occupied homes by roughly 85 percent.
Another plan, which received final approval in the Senate this week, would
give voters the option county by county of substituting a higher sales tax
for property tax cuts. Counties could choose which property taxes the relief
would apply to and how much the local sales tax would rise.
Some residents weren't even sure what cities levy now in sales tax, but many
oppose the idea of an increase, saying they don't trust lawmakers' promises
that the property tax cut would be permanent.
"I just see it as another way for the government to increase revenue," said
Jason Goings, a resident of nearby Graniteville shopping with his family in
Aiken. Goings said he wouldn't support any sales tax increase unless it
eliminated the property taxes on his home and car, but he doesn't foresee
that happening.
"Creating a new tax to get rid of the old tax never works," said Aiken
resident Jimmy Watson, while shopping at a Lowe's. "You never get rid of the
old tax."
South Carolina's sales tax is 5 percent, but like most counties statewide,
Aiken adds a local sales tax. A 2-cent increase would become 8 cents on the
dollar in Aiken County, a penny higher than in Augusta, about 15 miles away.
Small-business owners in downtown Aiken said they don't fear losing
customers to stores across the border. But like their customers, they oppose
any sales tax increase.
"In the long term, I don't think it would make any difference," said Ron
Brenneman, owner of Birds and Butterflies, a garden and pet store. "People
would be concerned at first, but they'd get used to it."
Det Haislip said people buy appliances at his True Value store, family owned
since 1959, for the local service. But already fed up with the taxes his
business pays, he sees the current debate as a "backdoor tax increase."
Christian Carlisle, of Plum Pudding kitchen store, said customers will
always shop at specialty shops like his, but he sees no retail benefit in a
sales tax increase.
Sen. Greg Ryberg, an Aiken Republican, supports the House plan. He thinks it
provides tax relief, but he understands residents' concerns. "The details
are not available to them today, so skepticism about government is the
prevailing thought. I don't blame them."
Economics professors differ on how a sales tax increase would affect the
economy.
John Mikesell, professor of public finance and policy analysis at Indiana
University, said a higher sales tax would hurt businesses near a state
border if cities are on both sides.
"It would take awhile. Some people would shop at a North Carolina Wal-Mart
instead of one in South Carolina," said Mikesell, editor of the journal
Public Budgeting and Finance. Over time, he said, new businesses would
locate in the neighboring state rather than South Carolina.
Studies show that for every cent a sales tax increases, sales decrease 7
percent, he said. "It's a two-prong affect," he said.
But Matthew Murray, a director of the Center for Business and Economic
Research at the University of Tennessee, disagreed.
"Raising the sales tax a percentage point or two is not likely to have a
dramatic effect," either on shopping habits or business locations, he said.
People value their time and gas money more than saving a little on sales
tax, he said.
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