Anger seems to be America’s newest and largest domestic product. If all of the energy from mad Americans could be bottled, it would be a better and more renewable energy source than wind or solar.

Americans are angry at everything these days — other drivers, Muslims who want to build a mosque in New York City, Republicans, Democrats, and, if you listen any to FOX News, the government.

But how much of that anger is misplaced or just plain misinformed?

Take the case of the elderly man who is mad because he hears state government might raise sales taxes on his prescription drugs.

First of all, he’s not paying any sales taxes on prescription drugs now. Second, the state Taxation Realignment Commission (TRAC) is only looking at a proposal that would lower all sales taxes by removing some of the $2.7 billion in special-interest tax exemptions that the state currently gives away. In the TRAC proposal for lowering sales taxes on everyone, prescription drugs bought under Medicaid or Medicare would continue to be exempt from sales taxes.
 

So for that guy with steam coming out of his ears because he’s “heard” his drugs might cost a little more, there’s a very real and strong possibility that any slight sales tax increases he may incur from drugs he buys that aren’t covered by Medicare will be more than offset by an overall sales tax decrease on everything else he purchases.

In other words, this guy is mad at something that will probably end up either saving him money or being revenue neutral as the TRAC group works to develop a proposal that will broaden the tax base but make the overall rate lower.

What’s even more interesting is that this elderly guy already is getting a huge income tax break compared to a regular family of four. (If any group really wants to get mad, it should be regular taxpayers with kids, as you’ll see below.)

Under current state law, South Carolinians get standard deductions and have personal exemptions from income tax that are subtracted from gross income in calculations of how much income should be subject to state tax.

For a working family of four with children who are 7 and 10, the standard deduction is $11,400 and the personal exemptions are $3,650 each for a total of $14,600. Add the two figures and you’ll find that this family can earn $26,000 tax-free. Only after earning this amount is the rest of their income subject to state tax.

But contrast what they’re paying to the mad elderly married guy. Because he and his wife are over 65, they get a special 65-year-old exemption of $15,000 each. Their standard deduction is “enhanced” to $13,600, compared to the $11,400 of the working family. Then they get another $25,680 of income exempted from income taxes due to a Social Security exclusion. They also get the regular personal exemption of $3,650 each.

Add up all of these exemptions and the elderly family of two can earn $76,580 before being subject to income tax. With most seniors on fixed incomes below this amount, that means most seniors pay no income tax.

Now armed with this information about the inequality between working families and the elderly, isn’t there something a little wrong with the picture? Can’t it be argued that working families are actually subsidizing the retirements of elderly people, who tend to use a lot more state services like health care than the working families? Does the tax disparity suggest we as a society value seniors more than working families?

The lesson of today’s example is that before you blow a gasket, do a little research. Double check what you hear on TV (or read in the newspapers). Maybe when you have more information than the slivers offered by some preying, opportunistic politicians, you’ll be able to turn that frown upside down.


Andy Brack, publisher of Statehouse Report, can be reached at brack@statehousereport.com. Let us know what you think: Email editor@free-times.com or leave us a comment below.