Researchers at the University of South Carolina's Darla Moore School of Business have designed an online tool to help South Carolina government, business and community leaders calculate the impact that changes in tax laws can have on the state's revenue.
Moore School Dean Hildy Teegen and researchers Caroline Strobel and Patrick Philipoom unveiled the South Carolina Tax Tool at the Statehouse on Jan. 31, demonstrating its simplicity and usefulness to legislative leaders and their staff.
"This tool provides a one-stop means for policy makers and others in our community to assess the impact of any contemplated changes in our tax policy on state revenues. As such, the calculator enables the user to adjust tax rates, bases and exemptions status consistent with contemplated changes," Teegen said.
The S.C. Tax Tool is available on SC Dash (scdash.com), an online clearinghouse for South Carolina economic data that the Moore School launched last year. The website aggregates and updates data from a variety of public and private, state and national sources concerning the South Carolina economy and allows users to create customizable searches and graphs.
Both SC Dash and the S.C. Tax Tool are free resources that anyone can use. A short tutorial video on the website explains how to use the new tax tool.
Strobel, an accounting professor, said the tool shows individual income, corporate income and sales taxes, including items excluded from sales tax. It also shows the assessed property base and the assessment ratios used on different types of property. She said it provides the base on which the governmental unit sets a millage rate adequate to fund the county, schools and various special tax districts such as sewer.
To use the tool, a person chooses the tax category he or she wants to adjust up or down by clicking on arrows or typing a proposed amount. Changes can be made at the local, county or state level.
As contemplated changes are made within the calculator, the difference will change on the screen. When finished, a simple click on overview provides a summary of the total revenue impact reflected by the proposed change.
"There isn't anything like it in South Carolina," Strobel said. "Currently lawmakers and business leaders only know how much revenue is collected. They don't have any simple and standard way of knowing what affect various changes to taxes would have on revenue. I think it will be an interesting and educational tool for people who are interested in how state revenues are raised."
Strobel says the model isn't dynamic, meaning it doesn't predict behavior - individual or corporate - or make assumptions. It is fact-driven, based on tax revenue data and provides simple calculations such as the amount of revenue generated or decreased from raising or lowering certain taxes.
The tool uses 2011 tax data provided by the Department of Revenue and Board of Economic Advisors (BEA). The tool will be updated as data is updated and made available. Strobel and Philipoom, a management science professor, began working on the S.C. Tax Tool a year ago. It is funded by the Moore School.
Teegen said she is pleased that the Moore School, as the state's flagship business school, can provide valuable resources and useful tools to help government and business leaders.
"The Moore School continues to apply its expertise and energy to advance our state's economy. This tax calculator will inform debate around tax policy in the state such that policy makers can focus on the substance of proposals considered in light of overall revenue impacts," Teegen said.