Elections, Holidays Are Over – Here Come the Tax Hikes

January 27, 2015

Inside Insight

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cash 20s

GRAB YOUR WALLETS, PEOPLE.

It has been a significant week on the tax battlefront. First, President Obama proposed another round of government expansions, together with tax hikes to pay for them. Here in the Palmetto State, meanwhile, Gov. Nikki Haley said she is willing to raise the gas tax, as long as we cut the income tax. I don’t know how all the math will work out on this, but one thing is for sure: state lawmakers will be a lot quicker to raise taxes than they will to lower them, or indeed to cut spending.

Like most people, I look at taxes on a purely personal level. I am semi-retired; 90 percent of my income is from pensions. While the state of South Carolina is actually fairly reasonably about taxing retirement income, the federal government has no mercy. Why should people be punished for having a small degree of success in life? Once again, it’s wealth redistribution. Confiscate a portion of a person’s retirement income to give away willy-nilly in a grand vote-buying scheme.

Here’s a good example of punishment. Apparently, here in South Carolina, if you can afford to have cable television, you can afford to pay out the nose. We a have fairly high-end cable package, which last month cost of $100.31 before taxes. Frankly, it’s pretty foolish of us to spend that amount, considering how few channels we actually watch. But, it’s our money.

The government, however, looks on cable as another opportunity to bring in revenue – and punishes us accordingly. Our total cable bill was taxed at a 13 percent rate: 6 percent state tax, 1 percent local option, 1 percent municipal tax (thanks, City of Abbeville!), and a “franchise tax” of 5 percent. So, our $100.31 bill ballooned to $113.35.

Why the assault on cable TV, which is already in trouble from a competitive standpoint? The government taxes because it can. Cable is an easy outlet to gouge, since most of us aren’t willing to give up our favorite channels.

The so-called franchise fee is particularly lucrative for local governments. The justification for this tax is that private entities are profiting by using local government rights of way. Hold it right there – don’t the taxpayers “own” their local governments? Why should I have to pay for usage of something I already own?

In addition to the cable franchise fee, which will net the City of Abbeville $65,000 in 2015, it will also reap $60,000 in natural gas fees, $31,000 in electric franchise fees, and will transfer a whopping $480,000 from its city owned electrical enterprise, since apparently it can’t charge itself a franchise fee. That adds up to over $636,000 in revenue, or stealth taxes, which we pay for the privilege of receiving cable, electricity and gas services to our homes. Additionally, the county of Abbeville will collect $100,000 in cable franchise fees in 2015.

When will enough be enough? The short answer is “never,” unless we change the mindset of government.

Nationally, the president, no matter who it is, will continue to advocate higher spending, and higher taxes will have to pay for that spending, either in the short term or long term.

On the state level, we truly need to revamp the Department of Transportation, along with every other agency. Some could be eliminated completely; most could be streamlined. We don’t need to be in the power business; Santee-Cooper should be privatized, along with our school bus system. Many commissions can go, along with their bureaucrats.

Locally, the same lesson applies. Stick to core governing, and keep your hands out of my pocket.

Steve Maxwell, a resident of Abbeville, is a retired postal manager and retired U.S. Army staff sergeant. He holds diplomas in both Hungarian and Russian language from the Defense Language Institute.