S.C. taxes, by the numbers

The Tax Foundation's latest rankings of state taxes are out, and we're No. 50. As in, no state collects less in taxes per resident than South Carolina does.

If that surprises you, then you've come to the right place. Much of what we think we know about taxes in our state is simply wrong. And while people are entitled to whatever opinion they want about whether taxes are too high or too low or just right, those opinions ought to be based on facts.

Of course, No. 50 isn't the whole story. Anyone who tries to tell you that a single number sums up tax rankings is misleading you. This particular ranking, for instance, doesn't include taxes collected by local government, which makes it not quite but nearly meaningless, since the division between state and local duties varies so much from state to state.

In the more useful ranking, which counts both state and local taxes, we're No. 49.

And both of those rankings just compare total taxes collected to the state's population. That means they are telling us as much about how poor we are as about how low our taxes are.

Our tax rate - which is the percentage of our total income that we pay in taxes - ranks 43rd. That means seven states have a lower tax rate than we do. (Our income, by the way, is $33,954 per capita, which ranks 46th nationally. Not something to celebrate no matter what you think about taxes.)

Even factoring in income is an imperfect way to judge ability to pay, because it doesn't account for wealthy retirees, for instance.

But while there are some drawbacks, the Tax Foundation's annual "Facts & Figures, How Does Your State Compare?" report is always worth spending some time with, because of how the organization approaches numbers.

The 74-year-old Washington think tank dreamed up Tax Freedom Day, which it defines as the day people stop working for the government and start working for themselves. While it pushes a clear goal, it doesn't have a dog in the fight when it comes to state rankings. And unlike most legitimate comparisons, its numbers are fairly up to date; that's because it uses projections instead of collections for local taxes, which are crucial for meaningful comparisons but which the Census Bureau can't compile in real time. The latest numbers are from 2009 and 2010.

On the downside, income isn't factored into enough of the rankings, the rankings don't include fees (which we collect way too many of in South Carolina), and some are calculated by counting not just how much residents pay to their own state and local governments but also how much they pay to governments in other states. I don't think that serves any useful purpose, but the amount is fairly constant from state to state, so it doesn't change the rankings much.

So, with all those caveats out of the way, let's look at how South Carolina stacks up.

50th. State tax collections per capita, at $1,577. The U.S. average is $2,339.

49th. Combined state and local tax burden per capita, at $2,742. Only Mississippians paid less, at $2,678 per capita. The U.S. average is $4,160.

43rd. Combined state and local tax burden as a percentage of state income, at 8.1 percent. The U.S. average is 9.8 percent.

35th. State tax revenue per capita, at $4,665. This figure and the next one count not only taxes but money from fees, licenses and federal funds.

36th. Combined state and local revenue per capita, at $7,006.

38th. Individual income tax collections, at $519 per capita.

44th. Corporate income tax collections, at $48 per capita. This says more about how little corporate income we have than about how much we tax corporations. Nonetheless, we score a similar 41st on a more complicated "corporate tax index" that is part of the foundation's business tax climate index.

16th. Combined state and local sales tax, at an average of 7.25 percent. (The 6 percent state-only rate ranks 15th.)

39th. Combined state and local sales tax collections per capita, at $711. The fact that our sales tax rate ranks so much higher than our sales tax collections reflects our overabundance of sales tax loopholes, our reluctance to tax services and our poverty.

47th. State gasoline tax, at 16.8 cents per gallon.

41st. State cigarette tax, at 57 cents per pack.

25th. State spirits excise tax, at $4.97 per gallon.

11th. State table wine excise tax, at $1.08 per gallon.

5th. State beer excise tax, at 77 cents per gallon.

24th. State and local cellphone taxes, at 9.52 percent.

45th. Property taxes on owner-occupied housing as a percentage of median home value, at 0.5 percent. The U.S. average is more than double that: 1.04 percent.

36th. State and local property tax collections per capita, at $963. The U.S. average is $1,352.

And our Tax Freedom Day, on April 3 last year, was earlier than it was in 39 states.

One other thing to note about our taxes: They're continuing to drop. Our 8.1 percent tax burden per capita in 2009 was down from 8.3 percent in 2008 and the lowest it has been at least since the Tax Foundation started compiling these numbers in 1977.

What that means - like much of the information in this report - is that when people complain that taxes are too high in South Carolina, they're not using any objective standard. Either they're reflecting the fact that they are among those being hurt by our Swiss-cheese tax code or else they're just saying they don't want to pay taxes.

Contact Scoppe, a columnist for The (Columbia) State, at cscoppe@thestate.com.