Collection cost – South Carolina

Instructions

Discuss all the revenue sources your state has. Discuss all types of income, sales, and property taxes as well as nontax income (user fees and charges, lotteries, etc) your state has. Make sure you analyze every tax and other sources of revenue from the following perspectives:
o Yield
o Equity
o Economic Neutrality
o Collection Cost
o Transparency.
When you discuss these five criteria make sure you discuss not only the revenue sources themselves but tax preferences (credits, exemptions, exclusions, deductions, and tax margins) related to these revenue sources in your state.

– What are the current and future concerns related to the tax system in your state? Are they peculiar to your state or do other states� or Federal governments have to deal with similar issues?

Ready Paper Excerpt

Collection cost

Although the recession hit the American states hard, the economic graph of the state of South Carolina exhibits progression due to a number of factors. One of these factors is the collection cost of the state. Here, the tax returns are the core source of economic growth in the state. The analysis of various metropolitan areas in the state is a direct indication of growth over the past decade. The state of South Carolina has many revenue sources but the main sources of income for the tax come from the individual income tax and sales tax.

The “individual income tax applies to households and to incorporated businesses, privately owned by individuals in the state.”[1] With only 3 % of the states working population being unemployed, the collection cost obtained from real income is a key source of state revenues. Apparently, by 2010, 46.6% of the state revenues were obtained from income tax. This amounted to $2.9 billion in annual income tax revenues for the state. With the mounts of income tax being that high, the collection costs and tax administration costs incurred by the state are equally high. Of the IRS financial budget, 7% of the tax collection costs amount from South Carolina and North Carolina alone. Collection costs incurred are high as they are collected on a monthly basis, where a deduction is done from one’s paycheck….

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