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Funding Greenville County Roads – Sales Tax Referendum or Gas Tax

Update: Greenville County Council voted to explore county road funding without a sales tax increase at this point. This was done under pressure from groups concerned with amount of the potential tax increase and the lack of a sound road funding policy on the state level.

Since Greenville County Council has moved foward with their sales-tax-to-fund-roads referendum, now is a good time to review the logic behind my proposal to adjust the current statewide gas tax.

A good article to start with is

As you will discover in my above linked article, I believe that funding roads through sales tax is bad tax policy. This approach shifts the burden to a tax structure already heavy with exemptions and would place the tax burden on a fewer number of taxpayers.

So, did Greenville County Council act prudently to allow the sales tax referendum to proceed?

The referendum will certainly spark debate about who should have ultimate responsibility to fund road repair – counties or the state. Hopefully, it will also help more taxpayers understand the need for comprehensive tax reform on the state level.

The state does not need to collect more overall revenue. However, the tax structure should be reformed to reflect our current needs. The gas tax could be the catalyst to bring about that reformation.

The basic reforms needed are simple. Personal income tax brackets should be flattened and deductions eliminated. Sales tax rates need to be lowered and exemptions eliminated. At the same time, the gas tax needs to be slightly increased. I am the primary sponsor on bills that would accomplish all of these objectives.

Ultimately, Greenville County Council’s referendum decision was a desperate act born of despair. They are attempting to solve a very real problem that should be addressed on a state level.