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May 30, 2007 – For immediate release...
Contacts:
- Bill Howell, 615-289-1397
- Tiffany Hartung, 865-684-3715
- Brian Miller, 865-712-8006
South Carolina to cut food tax, hike cigarette tax...
Tax Swap advocates call on Tenn. to follow suit
South Carolina, the heart of tobacco country and home of
the nation's lowest cigarette tax at 7 cents a pack, is rapidly
changing along with the rest of the South. Competing bills
in the South Carolina House and Senate would each raise the
state cigarette tax in order to fund a cut in the state's
3% food tax and other tax changes. The House version would
raise the cigarette tax 30 cents a pack and cut the food tax
from 3% to 1.4%, along with other reductions. The Senate recently
upped the ante by moving to raise the cigarette tax 45 cents
a pack and cut the food tax all the way down to 1%. Both measures
would completely repeal the remaining portion of the food
tax in the coming years.
Tax Swap advocates in Tennessee are pointing to South Carolina
this week as a model for what could be done in Tennessee.
"We've been advocating all year for a permanent, across-the-board
cut in the state's food tax, paid for with an increase in
the state cigarette tax. That's what the Tax Swap does,"
states Dave McIlwaine, State Chair of Tennesseans for Fair
Taxation (TFT). "With the nation's highest average food
tax and one of the lowest cigarette taxes in the country,
this kind of common sense swap is long overdue and has broad
support from both Democrats and Republicans." The Tax
Swap currently has 16 Republican sponsors and 14 Democratic
sponsors.
The Food Tax - Cigarette Tax Swap as originally filed (SB93/HB114),
would cut the state food tax of 6% in half to 3%, paid for
with an 44-cent cigarette tax increase. The latest proposals
coming out of the General Assembly would incorporate elements
of the Tax Swap, including a scaled-back food tax reduction
as part of a broader cigarette tax increase. In the House
plan, roughly a fifth of the 40-cent cigarette tax increase
would be used to reduce the state food tax from 6% to 5.5%.
At this point, it's unclear if the Senate's 20-cent cigarette
tax increase would include a permanent food tax reduction
or just a one-time holiday.
"If anything, the Senate should be talking about how
we can strengthen the House plan by doubling or even tripling
the food tax cut, instead of watering it down with a one-time
holiday in place of a permanent cut," adds McIlwaine.
"A one-time food tax holiday just isn't enough when you
pay the highest food tax in the nation the rest of the year.
We need a permanent, year-round food tax cut... all food,
all the time."
Despite record surpluses in South Carolina, legislators
are supporting the cigarette tax increase in order to pay
for reductions in the food tax and other taxes that impact
working families. Republicans control both chambers of the
South Carolina Assembly as well as the Governor's mansion.
The Governor of South Carolina is expected to sign the tax
swap into law upon passage.
Click
here to view The Herald (South Carolina) editorial re: the
SC measure
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