Electrical Power Generation Excise Tax

South Carolina, like most of the Southeastern states, is an electrical power exporter.

I propose to take advantage of our market position by imposing an Electrical Power Generation Excise Tax of $0.005 per kilowatt hour on electrical power generated in South Carolina.

According to a recent study by the National Wildlife Federation, available at http://www.nwf.org/Global-Warming/~/media/PDFs/Global%20Warming/Clean%20Energy%20State%20Fact%20Sheets/SOUTH_CAROLINA_10-22-2.ashx, electrical power utilization in South Carolina can be broken down as follows --

• Commercial -- 26.00%
• Industrial -- 39.00%
• Residential -- 35.00%

The study goes on further to state that residential electrical power consumption amounts to 6,591 kilowatt-hours per capita per year.

Using these statistics, the Electrical Power Generation Excise Tax proposal would, on average, add about $2.75 per person per month to residential electrical bills.

However, I furthermore propose that this tax be fully deductible from any State Income Tax liability, and that this deductibility be equally applicable to commercial, industrial, and residential consumers of electrical power in South Carolina.

Out-of-state consumers will pay this tax in full.

South Carolina has electrical power generation capacity exceeding 21,000,000 kilowatts, which equates to over 183,000,000,000 kilowatt hours annually.

Using the statistics from the National Wildlife Federation, we can estimate that South Carolina consumes roughly 85,000,000,000 killowatt-hours annually, or less than one-half of its rated electrical generating capacity, and whereas our residential power rates are considerably lower than the states to which we export power, the Electrical Power Generation Excise Tax could theoretically bring in over $490,000,000 per year.

Local Sales Taxes

A county governing body may enact a Local Sales Tax not exceeding two percent (2.00%) applicable to all retail sales, except as otherwise provided below, subject to the approval of the voters, which must be appropriated for local capital projects.

No Local Sales Tax shall be made applicable to retail sales of petroleum-based gaseous fuels.

No Local Sales Tax shall be made applicable to retail sales of petroleum-based liquid fuels.

No Local Sales Tax shall be made applicable to retail sales of prescription drugs.

State Sales Taxes

A State Sales Tax of five percent (5.00%) shall be made applicable to all retail sales, except as otherwise provided below.

A State Sales Tax of one percent (1.00%) shall be made applicable to all retail sales of non-prepared foods.

No State Sales Tax shall be made applicable to retail sales of petroleum-based gaseous fuels.

No State Sales Tax shall be made applicable to retail sales of petroleum-based liquid fuels.

No State Sales Tax shall be made applicable to retail sales of prescription drugs.

State Petroleum-Based Gaseous Fuels Tax

Petroleum-Based Gaseous Fuels shall be subject to a State Excise Tax equal to ten percent (10.00%) of the pre-tax retail price, which shall furthermore be subject to a floor of $0.50 per one thousand (1,000) cubic feet.

For example, if the pre-tax retail price of natural gas is $12.00 per one thousand (1,000) cubic feet, then the State Excise Tax shall be set to $1.20. If the Federal Excise Tax is set to $1.20, then the total retail price shall be $14.40 per one thousand (1,000) cubic feet (excluding any local taxes).

State Petroleum-Based Liquid Fuels Tax

Petroleum-Based Liquid Fuels shall be subject to a State Excise Tax equal to ten percent (10.00%) of the pre-tax retail price, which shall furthermore be subject to a floor of $0.20 per gallon.

For example, if the pre-tax retail price of gasoline is $2.00 per gallon, then the State Excise Tax shall be set to $0.20. If the Federal Excise Tax is set to $0.20, then the total retail price shall be $2.40 per gallon (exclusing any local taxes).

Monies collect pursuant to this tax shall be used solely for the construction and maintenance of public transportation facilities (airports, highways, and railways).

Individual Income Taxes

The Household Federal Poverty Level will be used to delineate the income levels subject to a State Income Tax liability.

The Household Federal Poverty Level will be determined by the number of working-age adults, the number of retired adults, the number of blind and/or disabled individuals, and the number of children claimed on the Federal Income Tax return for individuals and families.

The Citizenship Status of individuals reporting income will be used to determine whether income subject to a base State Income Tax liability is to be subject to any additional State Income Tax liability.

Individuals and families whose gross income does not exceed the Household Federal Poverty Level shall have no State Income Tax liability.

Individuals and families whose gross income exceeds the Household Federal Poverty Level shall have a Federal Income Tax liability calculated as follows --

• The portion of the gross income exceeding the Household Federal Poverty Level shall be subject to a State Income Tax liability of two percent (2.00%).
• The portion of the gross income exceeding two (2) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of two percent (2.00%).
• The portion of the gross income exceeding three (3) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of two percent (2.00%).
• The portion of the gross income exceeding four (4) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of two percent (2.00%).

Non-citizen individuals and families whose gross income exceeds the Household Federal Poverty Level shall be subject to an additional Federal Income Tax liability calculated as follows --

• The portion of the gross income exceeding the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of one-half of one percent (0.50%).
• The portion of the gross income exceeding two (2) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of one-half of one percent (0.50%).
• The portion of the gross income exceeding three (3) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of one-half of one percent (0.50%).
• The portion of the gross income exceeding four (4) times the Household Federal Poverty Level shall be subject to an additional State Income Tax liability of one-half of one percent (0.50%).

That is it.

That is the entirety of the State Income Tax to be collected from individuals and families.

No distinction will be made in respect to the source of income. Wages, investment, etc., will all be treated equally.

Social Security benefits will not be treated as income for the purpose of determining any State Income Tax liability.

Medicare benefits will not be treated as income for the purpose of determing any State Income Tax liability.

No tax deductions of any kind will be allowed.

Broken

Like the US Tax Code (see http://ustaxreform.blogspot.com/), the SC Tax Code is broken.

It is filled with loopholes.

In succeeding posts I plan to detail some ideas for reforming the SC Tax Code, by implementing a simplified income tax structure, by eliminating deductions, and by setting some excise tax rates as a percentage of the pre-tax retail price of the product.

Please note that these proposals are a "work-in-progress" and may change significantly as a result of additional research and the submission of your ideas and recommendations.  Please participate!  I will gladly consider the incorporation of reasonable ideas and recommendations.  Unreasonable or unworkable ideas and recommendations will be rejected, but an explanation will be offerred.